Question

1.How much money will be required to buy 400,RS.12.50 shares at a premium or RS 1 ?
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Answer 1

Given: RS.12.50 shares at a premium or RS 1

To find: How much money will be required to buy 400 shares?

Solution:

• Now we have given that there are 400 shares.

• RS.12.50 shares at a premium or RS 1 means:

• The nominal value of the share is Rs 12.5 .

• The market value will be: Rs 12.5 + Rs 1 = Rs 13.5

• So the total cost of 1 share will be: Rs 13.5

• Now total cost for 400 shares will be:

                      400 x Rs 13.5

                      Rs 5400

Answer:

            So Rs 5400 is required to buy 400 shares.

Answer 2

Given:

Number of shares = 400

The meaning of the statement Rs 12.50 shares at a premium of Rs 1:

Nominal value of share = Rs. 12.50

Its market value = Rs 12.50 + Rs 1 = Rs 13.50

Therefore, the money required to buy 1 share = Rs 13.50

Thus:

The money required to buy 400 shares = 400 x Rs 13.50 = Rs 5400