Answer :

Let FV = Rs. 100

Company A:

We know that dividend per share =

∴ Dividend per share =

= Rs. 16

Income on Rs. 1 = = Rs. 0.20

Company B:

__We know that dividend per share =__

∴ Dividend per share =

= Rs. 20

Income on Rs. 1 = = Rs. 0.16

∴ Investment of company A is more profitable than company B.

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