Mathematics
Salman invests a sum of money in ₹ 50 shares, paying 15% dividend quoted at 20% premium. If his annual dividend is ₹ 600, calculate :
(i) the number of shares he bought.
(ii) his total investment.
(iii) the rate of return on his investment.
Shares & Dividends
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Answer
(i) Let no. of shares be x.
Annual income = No. of shares × Rate of div. × N.V. of 1 share
600 = x
x = = 80.
Hence, no. of shares = 80.
(ii) M.V. = ₹ 50 + = ₹ 50 + ₹ 10 = ₹ 60
Total investment = 80 × ₹ 60 = ₹ 4,800.
Hence, total investment = ₹ 4,800.
(iii) Annual income = ₹ 600.
Return % = %
Hence return % = 12.5%.
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