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Mathematics

A man invests ₹ 1,680 in buying shares of nominal value ₹ 24 and selling at 12% premium. The dividend on the shares is 15% per annum. Calculate:

(i) the number of shares he buys;

(ii) the dividend he receives annually.

Shares & Dividends

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Answer

(i) F.V. = ₹ 24

Premium = 12 % = 12100×24\dfrac{12}{100} \times 24 = ₹ 2.88.

Market value = ₹ 24 + ₹ 2.88 = ₹ 26.88.

Investment = ₹ 1,680

No. of shares = 168026.88\dfrac{1680}{26.88} = 62.5.

Hence, the no. of shares = 62.5.

(ii) Annual income = No. of shares × Rate of div. × N.V. of 1 share

= 62.5×15100×2462.5 × \dfrac{15}{100} \times 24

= 225.

Hence, dividend received annually = ₹ 225.

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