A man buys 50, ₹ 100 shares of a company at ₹ 125 paying 6% dividend per annum. At the end of the year, the company will pay a total dividend on :

Given,

Number of shares bought = 50

Nominal value (N.V.) of each share = ₹ 100

Market value (M.V.) of each share = ₹ 125

Rate of dividend = 6%

We know that,

Dividend is always paid by the company on the nominal value (face value) of the shares and not on their market value.

Total nominal value of the shares = No. of shares × N.V. of 1 share

= 50 × 100

= ₹ 5,000

Thus, the company will pay the total dividend on ₹ 5,000.

Hence, option 3 is the correct option.