A man wants to buy 600 shares available at ₹ 125 having the par value ₹ 100.

(i) How much does he invest?

(ii) If the dividend is 8% per annum, what will be his annual income?

(iii) If he wants to increase his annual income by ₹ 800, how many extra shares should he buy?

Given,

Number of shares = 600

Market Value = ₹ 125

Face Value = ₹ 100

Rate of dividend = 8%

(i) By formula,

Investment = Number of shares × Market value of each share

= 600 × 125

= ₹ 75,000.

Hence, the man invests ₹ 75,000.

(ii) By formula,

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

= $600 \times \dfrac{8}{100} \times 100$

= ₹ 4,800.

Hence, the annual income equals to ₹ 4,800.

(iii) Given,

Required increase in income = ₹ 800

Income from each share = Rate of div. × N.V. of 1 share

= $\dfrac{8}{100} \times 100$

= ₹ 8.

Let the number of extra shares to be purchased be x.

$\therefore x \times 8 = 800 \\[1em] \Rightarrow x = \dfrac{800}{8} = 100.$

Hence, the man should buy 100 extra shares.