Question

A man has some shares of rs 100 par value paying 6% dividend.he sells half of these at a discount of 10% and invests the proceeds in 7% rs 50 shares at a premium of rs 10.this transaction decreases his income from dividends by rs 120. calculate 1. the number of shares before the transaction. 2. the number of shares he sold. 3. his initial annual income from shares.

Answer 1

Let the number of shares is x

Nominal value =₹100

Div% is 6%

annual income = x×100×6/100

6x

Annual income of half shares X/2 =3x

Selling price = at a discount of 10%

So X/2 ×90 = 45x

Investment is 45x

Shares = 3/4x d%= 7%. NV = ₹50

MV = ₹60

AI = 3/4x × 7/100 ×50

21/8x

Change in income 3x-21/8x=₹120

1 X=shares = 320

2. Shares sold. 160

3. Initial income. 6×320= 1920

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Answer 2

Here's d answer to the question