Market value for a target yield: A company pays a 15% annual dividend on shares of par $10. Shyam wants a 10% return on her investment. At what market price per share should she buy (so that dividend yield is 10%)?

Introduction / Context: Dividend yield equals annual dividend per share divided by the market price. To achieve a target yield, set dividend/price equal to the desired yield and solve for the price. This is a common pricing question in stocks-and-shares topics.

Given Data / Assumptions:

• Par value = $10; dividend rate = 15% ⇒ dividend per share = $1.50 per year.
• Desired yield = 10% per annum.

Concept / Approach: Yield = Dividend / Market price. Rearranged, Market price = Dividend / Yield. Substitute dividend per share and the desired yield to find the fair buying price.

Step-by-Step Solution:

Verification / Alternative check: At price $15, yield = 1.50 / 15 = 0.10 = 10%, matching the target.

Why Other Options Are Wrong: $20 or $24 would produce yields below 10%; $25 even lower; $12 would over-yield at 12.5%.

Common Pitfalls: Using par value in the denominator instead of market price; mixing up percentage points vs. decimal fractions.

Final Answer: $ 15