Mr. A is holding 2,00,000 shares of ABC Ltd. It is presently trading on NSE at cum dividend price of 100 per share. Mr. A has a policy to re-invest…

CA Intermediate · Financial Management and Strategic Management · MTP · May 2025
Mr. A is holding 2,00,000 shares of ABC Ltd. It is presently trading on NSE at cum dividend price of 100 per share. Mr. A has a policy to re-invest the amount of any dividend received into the shares of ABC Ltd. again. If ABC Ltd. has declared a dividend of 20 per share, determine the no. of shares that Mr. A would hold after he invests dividend in the shares of ABC Ltd.
(A) 1,00,000
(B) 2,50,000
(C) 2,80,000
(D) 50,000

Suggested Answer and Working Notes:

Correct Answer: Option (B)

2,50,000

Topics: Part-A: Financial Management

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