A man invests ₹8800 on buying shares of face value of rupees hundred each at a premium of 10%. If he earns ₹1200 at the end of year as dividend, find:

(i) the number of shares he has in this company

(ii) the dividend percentage per share.

Nominal Value per share = ₹100

Total Investment = ₹8800

Annual Dividend = ₹1200

(i)
As the shares were bought at 10% premium,

Market Value of one share

$= 100 + \Big(\dfrac{10}{100} \times 100\Big) \\[0.5em] = 100 + 10 \\[0.5em] = ₹110$

Number of shares bought

$= \dfrac{\text{Total Investment}}{\text{MV per share}} \\[0.7em] = \dfrac{8800}{110} \\[0.5em] = \bold{80}$

∴ Number of shares the man has in the company = 80

(ii)
Let the dividend percentage per share be r%

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

According to the given,

$1200 = 80 \times \dfrac{r}{100} \times 100 \\[0.5em] 1200 = 80r \\[0.5em] r = \dfrac{1200}{80} \\[0.5em] r = 15$

∴ Dividend percentage per share = 15%