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Mathematics

A man invests ₹ 8,800 on buying shares of face value ₹ 100 each at a premium of 10%. If he earns ₹ 1,200 at the end of the year as dividend, find :

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

(ii) the dividend percentage per share.

Shares & Dividends

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Answer

Given,

Investment = ₹ 8,800

Face Value = ₹ 100

Premium rate = 10%

Premium = 10100×100\dfrac{10}{100} \times 100 = ₹ 10

Market Value = Face Value + Premium = ₹ 100 + ₹ 10 = ₹ 110

Dividend = ₹ 1,200

(i) Number of shares = InvestmentMarket value of each share=8800110\dfrac{\text{Investment}}{\text{Market value of each share}} = \dfrac{8800}{110} = 80

Hence, the number of shares the man has in the company equals to 80.

(ii) By formula

Dividend per share = Total dividendNumber of shares=120080\dfrac{\text{Total dividend}}{\text{Number of shares}} = \dfrac{1200}{80} = ₹ 15.

Dividend percentage per share = 15100×100\dfrac{15}{100} \times 100 = 15%.

Hence, the dividend percentage per share is 15%.

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