Compute dividend rate from totals: A pharmaceutical company has issued 125,000 shares of par value $20 each. If the total annual dividend declared is $375,000, what is the percentage dividend rate paid by the company?

Introduction / Context: To determine a dividend rate from company-wide totals, divide the dividend amount by the total par capital and convert to a percentage. This is a straightforward ratio application frequently used in stocks-and-shares aptitude problems.

Given Data / Assumptions:

• Total shares = 125,000.
• Par value per share = $20.
• Total dividend declared = $375,000.

Concept / Approach: Dividend rate (%) = (Total dividend / Total par capital) * 100, where total par capital = number of shares * par value.

Step-by-Step Solution:

Verification / Alternative check: 10% of $2.5 million is $250,000; adding half again (5%) gives $125,000 more; total $375,000 confirms 15%.

Why Other Options Are Wrong: 13%, 14%, 12.5%, and 10% do not match the computed ratio exactly.

Common Pitfalls: Confusing par value with market value; forgetting to multiply shares by par before dividing.

Final Answer: 15%