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Mathematics

A man invests ₹ 7,770 in a company paying 5 percent dividend when a share of nominal value of ₹ 100 sells at a premium of ₹ 5. Find :

(i) the number of shares bought;

(ii) annual income;

(iii) percentage income.

Shares & Dividends

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Answer

Total money invested = ₹ 7,770

Market value = ₹ 100 + ₹ 5 = ₹ 105

(i) No. of shares bought = 7770105\dfrac{7770}{105} = 74.

Hence, no. of shares bought = 74.

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

= 74×5100×10074 × \dfrac{5}{100} \times 100

= ₹ 370.

His total annual income = ₹ 370.

(iii) Percentage income = 3707770×100=370007770\dfrac{370}{7770} \times 100 = \dfrac{37000}{7770} = 4.76%.

Hence, percentage income = 4.76%.

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