Q.A company's shares have a face value of ₹10 each and it declares a dividend of 8%. Find the total dividend received by a shareholder holding 500 such shares.

The dividend is always calculated on the face value of the shares, not on any market price, and then multiplied by the number of shares held.

Each ₹10 share earns ₹0.80 of dividend, so 500 shares earn 500 times that amount.

Method 1 — Per-share then total.

Face value per share $FV = ₹10$, dividend rate $r = 8\%$, number of shares $= 500$.

Dividend on one share:

Total dividend on 500 shares:

Method 2 — Dividend on total face value (cross-check). The total face value of 500 shares is $500\times10 = ₹5{,}000$. The dividend is 8% of this total nominal amount:

This matches the per-share method exactly, since applying the rate to each share and summing is arithmetically identical to applying it to the total face value at once.

The most common error is applying the 8% to a market price instead of the ₹10 face value. The dividend rate is always reckoned on the face (nominal) value, whatever the shares are trading at in the market.