Shares & Dividends — Multiple Choice Questions

The sum of money required to buy 50, ₹ 40 shares at ₹ 38.50 is :

1. ₹ 1920

2. ₹ 1924

3. ₹ 1925

4. ₹ 1952

Answer

M.V. of share = ₹ 38.50

No of shares bought = 50

Money required = ₹ 38.50 × 50 = ₹ 1925.

Hence, Option 3 is the correct option.

If Jagbeer invest ₹10320 on ₹100 shares at a discount of ₹14, then the number of shares he buys is

1. 110
2. 120
3. 130
4. 150

Answer

Nominal Value per share = ₹100

As Jagbeer buys the shares at a discount of ₹14,
∴ Market Value per share = ₹100 - ₹14 = ₹86

Jagbeer's Total Investment = ₹10320

$\therefore \text{No. of shares} = \dfrac{\text{Investment}}{\text{M.V.}} \\[0.5em] = \dfrac{10320}{86} = 120$

∴ Option 2 is the correct option.

If Nisha invests ₹19200 on ₹50 shares at a premium of 20%, then the number of shares she buys is

1. 640
2. 384
3. 320
4. 160

Answer

Nominal Value per share = ₹50

As Nisha buys the shares at a premium of 20%,
∴ Market Value per share = ₹50 + 20% of ₹50 = ₹50 + ₹10 = ₹60

Nisha's Total Investment = ₹19200

$\therefore \text{No. of shares} = \dfrac{\text{Investment}}{\text{M.V.}} \\[0.5em] = \dfrac{19200}{60} = 320$

∴ Option 3 is the correct option.

₹40 shares of a company are selling at 25% premium. If Mr. Jacob wants to buy 280 shares of the company, then the investment required by him is

1. ₹11200
2. ₹14000
3. ₹16800
4. ₹8400

Answer

Nominal Value per share = ₹40

As the shares are selling at 25% premium,
∴ Market Value per share = ₹40 + 25% of ₹40 = ₹40 + ₹10 = ₹50

No of shares Mr. Jacob wants to buy = 280

∴ Total Investment of Mr. Jacob = 280 x 50 = ₹14000

∴ Option 2 is the correct option.

Arun possesses 600 shares of ₹25 of a company. If the company announces a dividend of 8%, then Arun's annual income is

1. ₹48
2. ₹480
3. ₹600
4. ₹1200

Answer

No. of shares = 600

Nominal Value per share = ₹25

Rate of Dividend = 8%

Annual Dividend = No. of shares x Rate of Dividend x Nominal Value per share

$= 600 \times \dfrac{8}{100} \times 25 \\[0.5em] = ₹1200$

∴ Option 4 is the correct option.

A man invests ₹24000 on ₹60 shares at a discount of 20%. If the dividend declared by the company is 10%, then his annual income is

1. ₹3000
2. ₹2880
3. ₹1500
4. ₹1440

Answer

Nominal Value per share = ₹60

As the shares are bought at a discount of 20%,
∴ Market Value per share = ₹60 - 20% of ₹60 = ₹60 - ₹12 = ₹48

Total Investment = ₹24000

$\therefore \text{No. of shares} = \dfrac{\text{Investment}}{\text{M.V.}} \\[0.5em] = \dfrac{24000}{48} = 500$

Rate of Dividend = 10%

Annual Dividend = No. of shares x Rate of Dividend x Nominal Value per share

$= 500 \times \dfrac{10}{100} \times 60 \\[0.5em] = ₹3000$

∴ Option 1 is the correct option.

Salman has some shares of ₹50 of a company paying 15% dividend. If his annual income is ₹3000, then the number of shares he possesses is

1. 80
2. 400
3. 600
4. 800

Answer

Let the number of shares Salman owns be x

Nominal Value per share = ₹50

Rate of Dividend = 15%

Annual Dividend = ₹3000

Annual Dividend = No. of shares x Rate of Dividend x Nominal Value per share

According to the given,

$3000 = x \times \dfrac{15}{100} \times 50 \\[0.5em] 3000 = \dfrac{15x}{2} \\[0.5em] x = \dfrac{3000 \times 2}{15} \\[0.5em] x = 400$

∴ Option 2 is the correct option.

(i) Shares of company A, paying 12%, ₹ 100 shares are at ₹ 80.

(ii) Shares of company B, paying 12%, ₹ 100 shares are at ₹ 100.

(iii) Shares of company C, paying 12%, ₹ 100 shares are at ₹ 120.

Shares of which company are at premium ?

1. Company A

2. Company B

3. Company C

4. Company A and C

Answer

Companies in which Market value is greater than nominal value, there shares are at premium.

∴ Shares of company C are at premium.

Hence, Option 3 is the correct option.

The sum invested to purchase 15 shares of a company of nominal value ₹ 75 available at a discount of 20% is:

1. ₹ 60

2. ₹ 90

3. ₹ 1350

4. ₹ 900

Answer

N.V. = ₹ 75

Discount = 20%

M.V. = ₹ 75 - $\dfrac{20}{100} \times 75$

= ₹ 75 - ₹ 15

= ₹ 60.

Cost of 15 shares = 15 × ₹ 60 = ₹ 900.

Hence, Option 4 is the correct option.