Kabir bought 120 shares of a company with nominal value ₹100, available at a premium of ₹25. Find :

(a) the money invested by Kabir in buying these shares.

(b) the rate of dividend, if he received ₹ 1,080 as dividend from these shares after one year.

(c) his rate of return.

(a) Given,

Number of shares = 120

Nominal value = ₹ 100

Premium = ₹ 25

Market price per share = ₹100 + ₹25 = ₹125

Total money invested by Kabir = Number of shares × Market price per share

= 120 × 125 = ₹ 15,000.

Hence, the money invested by Kabir = ₹ 15,000.

(b) Given,

Total dividend = ₹ 1080

Let rate of dividend be R.

By formula,

Dividend = No. of shares × $\dfrac{\text{Rate of dividend}}{100}$ × N.V. of share

1080 = 120 × $\dfrac{R}{100}$ × 100

1080 = 120 × R

R = $\dfrac{1080}{120}$

R = 9%.

Hence, rate of dividend = 9%.

(c) Given,

Investment = ₹ 15,000

Rate of return = $\dfrac{\text{Total dividend}}{\text{Total investment}}$ x 100

= $\dfrac{1080}{15000} \times 100$

= 7.2%.

Hence, rate of return = 7.2%.