Q.A ₹100 share, on which a dividend of 16% is about to be declared, is quoted at ₹136 cum-dividend. Find its ex-dividend price.

The ex-dividend price is the cum-dividend price with the forthcoming dividend removed, and that dividend is calculated on the face value.

Given: face value $FV = ₹100$, dividend rate $r = 16\%$, cum-dividend price $= ₹136$.

Step 1 — Dividend about to be paid (on face value):

Step 2 — Ex-dividend price (cum-dividend price minus the dividend, §7): …

Cross-check by reversing the conversion. Adding the dividend back to the ex-dividend price should return the cum-dividend price: $120 + 16 = ₹136$, which is exactly the quoted …

A common mistake is computing the dividend as 16% of the ₹136 cum-dividend price rather than of the ₹100 face value. The dividend is always on f …