Mathematics

Mr. Sharma has 60 shares of N.V. ₹ 100 and sells them when they are at a premium of 60%. He invests the proceeds in shares of nominal value ₹ 50, quoted at 4% discount, and paying 18% dividend annually. Calculate :
(i) the sale proceeds
(ii) the number of shares he buys; and
(iii) his annual dividend from the shares.

83 Likes

(i) Market value of initial shares = ₹ 100 + $\dfrac{60}{100} \times 100$ = ₹ 100 + ₹ 60 = ₹ 160.

Sale proceeds = 60 × ₹ 160 = ₹ 9,600.

Hence, sale proceeds = ₹ 9,600.

(ii) M.V. of second shares = ₹ 50 - $\dfrac{4}{100} \times 50$ = ₹ 50 - ₹ 2 = ₹ 48.

No. of shares = $\dfrac{9600}{48}$ = 200.

Hence, no. of shares = 200.

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

= 200 × $\dfrac{18}{100} \times 50$

= ₹ 1,800.

Hence, annual dividend = ₹ 1,800.

Answered By

31 Likes