A company with 500 shares of nominal value ₹ 120 declares an annual dividend of 15%. Calculate :

(i) the total amount of dividend paid by the company;

(ii) annual income of Mr. Sharma who holds 80 shares of the company;

If the return percent of Mr. Sharma from his shares is 10%, find the market value of each share.

Given,

Total number of shares = 500

Nominal Value (Face Value) = ₹ 120

Dividend Rate = 15%

(i) By formula,

Total dividend = Total number of shares × Rate of div. × N.V. of 1 share

∴ Total dividend = $500 \times \dfrac{15}{100} \times 120$ = ₹ 9,000.

Hence, the total amount of dividend paid by the company is ₹ 9,000.

(ii) Given,

Mr. Sharma holds 80 shares.

By formula,

Annual dividend = No. of shares × Rate of div. × N.V. of 1 share

∴ Annual dividend = $80 \times \dfrac{15}{100} \times 120$ = ₹ 1,440

Hence, Mr. Sharma's annual income is ₹ 1,440.

Given,

The return percent of Mr. Sharma from his shares is 10%

Let the market value of shares be ₹ x.

By formula,

Rate of dividend × N.V. = Profit (return) % × M.V

$\therefore \dfrac{15}{100} \times 120 = \dfrac{10}{100} \times x \\[1em] \Rightarrow 15 \times 120 = 10x \\[1em] \Rightarrow x = \dfrac{1800}{10}\\[1em] \Rightarrow x = ₹\ 180.$

Hence, the market value of each share is ₹ 180.