A hydro power company decided to distribute 20% dividend to its shareholders. A shareholder who bought 900 shares out of all shares received Rs. 20,700 as a dividend.
a) From which amount is the dividend distributed?
Answer (2)
The total amount from which the dividend was distributed is Rs. 103,500. This is calculated by setting up an equation based on the 20% dividend payout and the total dividend received by a shareholder. By solving the equation, we find the total amount to be Rs. 103,500.
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Define the total amount from which the dividend was distributed as A .
Express the total dividend distributed as 0.20 A .
Set up the equation 0.20 A = 20700 , assuming the shareholder owns all the shares.
Solve for A : A = 0.20 20700 = 103500 . The amount from which the dividend is distributed is 103500 .
Explanation
Understanding the Problem We are given that a company distributes 20% of a certain amount as dividends to its shareholders. A particular shareholder, who owns 900 shares, received Rs. 20,700 as their dividend. We need to find the total amount from which the dividend was distributed.
Defining the Total Dividend Let's denote the total amount from which the dividend was distributed as A . The company distributes 20% of this amount as dividends, so the total dividend distributed is 0.20 A .
Shareholder's Dividend We are told that a shareholder who bought 900 shares received Rs. 20,700 as a dividend. Let's assume that the shareholder owns all the shares. In this case, the dividend received by this shareholder is equal to the total dividend distributed by the company.
Setting up the Equation Therefore, we can set up the equation: 0.20 A = 20700 . To find A , we divide both sides of the equation by 0.20: A = 0.20 20700 .
Calculating the Total Amount Calculating the value of A : A = 0.20 20700 = 103500 .
Final Answer Therefore, the total amount from which the dividend was distributed is Rs. 103,500.
Examples
Imagine a company decides to share a portion of its profits with its investors as a dividend. If the company distributes 20% of its total profit, and you, as an investor, receive a part of that dividend based on your shareholding, you can calculate the company's total profit. For instance, if you received Rs. 20,700 as a dividend from your shares, you can determine the company's total profit by understanding the percentage distributed. This concept is useful in understanding investment returns and company financials.
