A man invests ₹ 22,500 in ₹ 50 shares available at 10% discount. If the dividend paid by the company is 12%, calculate :

(i) the number of shares purchased;

(ii) the annual dividend received;

(iii) the rate of return he gets on his investment.

Given,

Investment = ₹ 22,500

Face Value = ₹ 50

Discount Rate = 10%

Discount = $\dfrac{10}{100} \times 50$ = ₹ 5

Market Value = Face Value - Discount = ₹ 50 - ₹ 5 = ₹ 45

Rate of dividend = 12%

(i) By formula,

Number of shares = $\dfrac{\text{Investment}}{\text{Market value of each share}}$

= $\dfrac{22,500}{45}$

= 500.

Hence, the number of shares purchased is 500.

(ii) By formula,

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

= $500 × \dfrac{12}{100} \times 50$

= ₹ 3,000.

Hence, the annual dividend received is ₹ 3,000.

(iii) By formula,

Rate of return = $\dfrac{\text{Income}}{\text{Investment}} \times 100\%$

= $\dfrac{3000}{22500} \times 100\%$

= 13.33%.

Hence, the rate of return is 13.33%.