Mathematics
Rohit invested ₹ 9,600 on ₹ 100 shares at ₹ 20 premium paying 8% dividend. Rohit sold the shares when the price rose to ₹ 160. He invested the proceeds (excluding dividend) in 10% ₹ 50 shares at ₹ 40. Find the :
(i) original number of shares.
(ii) sale proceeds.
(iii) new number of shares.
(iv) change in the two dividends.
Shares & Dividends
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Answer
(i) M.V. of first type of share = ₹ 100 + ₹ 20 = ₹ 120.
Investment = ₹ 9,600
No. of shares = = 80.
Hence, no. of shares = 80.
(ii) S.P. of 1 share = ₹ 160,
S.P. of 80 shares = 80 × ₹ 160 = ₹ 12,800.
Hence, sale proceeds = ₹ 12,800.
(iii) M.V. of second type of share = ₹ 40.
Investment = ₹ 12,800
No. of shares = = 320.
Hence, no. of shares = 320.
(iv) Annual dividend = No. of shares × Rate of div. × N.V. of 1 share
In first case :
Annual dividend = 80 × = ₹ 640.
In second case :
Annual dividend = 320 × = ₹ 1600.
Difference = ₹ 1600 - ₹ 640 = ₹ 960
Hence, there is an increase of ₹ 960 in dividend amount.
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Related Questions
₹100 shares of a company giving 10% dividend are selling at ₹150. Mr. Saha invests ₹ 18,000 to buy these shares. He sells 80% of his shares after one year. Find :
(a) the number of shares he purchased.
(b) the number of shares he sold.
(c) his annual income from the remaining 20% shares he still holds.
Mr. Gautam sold a certain number of ₹ 20 shares paying 8% dividend at ₹ 18 and invested the proceed in ₹ 10 shares paying 12% dividend at 50% premium. If the change in his annual income is ₹ 120, find the number of shares sold by Mr. Gautam.
A man invests ₹ 50,000 of his savings in 12%, ₹ 100 shares at ₹ 125 another ₹ 60,000 in 15%, ₹ 100 shares at ₹ 120 and remainder 18% ₹ 100 shares at ₹ 140. If his annual income is ₹ 21,300 find :
(i) the rate of return on the whole.
(ii) the investment in third company.
Case study:
Share market is a place where investors trade different instruments like stocks, mutual funds, etc.It is a place where companies sell parts (called shares) of their companies and investors buy them in expectation of greater returns.
Mr. Reddy wants to invest his money in company which gives a better return. He has following options:
Company X : ₹ 100 shares are available at ₹ 120 with a dividend of 8% p.a.
Company Y : ₹ 10 shares are available at ₹ 8 with a dividend of 6% p.a.
Based on the above information, answer the following questions :
(i) If Mr. Reddy wants to invest ₹ 15,000 in company X, then what will be his Annual Income ?
(ii) If Mr. Reddy wants to invest ₹ 15,000 in company Y, then what will be his Annual Income ?
(iii) Which company is a better option for Mr. Reddy to invest in ?