A man invests ₹ 10560 in a company, paying 9% dividend, at the time when its ₹ 100 shares can be bought at a premium of ₹ 32. Find :

(i) the number of shares bought by him;

(ii) his annual income from these shares and

(iii) the rate of return on his investment.

Given,

N.V. of share = ₹ 100

M.V. = N.V. + Premium = ₹ 100 + ₹ 32 = ₹ 132.

(i) No. of shares bought = $\dfrac{\text{Investment}}{\text{M.V.}} = \dfrac{10560}{132}$ = 80.

Hence, no. of shares = 80.

(ii) Income on 1 share = 9% of N.V.

= $\dfrac{9}{100} \times 100$ = ₹ 9.

Annual income = Income on 1 share × No. of shares

= ₹ 9 × 80 = ₹ 720.

Hence, annual income = ₹ 720.

(iii) Rate of return = $\dfrac{\text{Income}}{\text{Investment}} \times 100$

$= \dfrac{720}{10560} \times 100 \\[1em] = \dfrac{72000}{10560} \\[1em] = 6\dfrac{9}{11}\%.$

Hence, rate of return = $6\dfrac{9}{11}$ %.