n NISM Certifications
XV NISM Series XV
Medium

An investor purchases 100 shares of a company with a face value of Rs. 2 at a total cost of Rs. 10,000. If the company declares a 300% dividend, what is the dividend yield on the invested amount?

Practice question from NISM XV Mock Test 7 — bank. The correct answer is highlighted below with a full explanation.

Options

  1. A

    3%

  2. 6%

    Correct answer

  3. C

    1.75%

  4. D

    5.5%

Why this is the answer

Dividend yield = (Dividend Received ÷ Invested Amount) × 100. A 300% dividend on Rs. 2/share = Rs. 6/share. For 100 shares: 6 × 100 = Rs. 600. Invested amount = Rs. 10,000. Dividend yield = 600 ÷ 10,000 × 100 = 6%, showing the return from dividends relative to investment.

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