Question

A man invests Rs. 8,800 in buying shares of a company of face value of Rs. 100 each at a premium of 10%. If he ears Rs. 1,200 at the end of the year as dividend. Find; i) The number of shares he has in the company. ii) The dividend percent per share.​

Answer 1

Answer :-

i) The number of shares he has in the company = 80

ii) The dividend percent per share = 15%

Solution :-

Total invested money = Rs. 8800

Premium = 10%

Face value of 1 share = Rs. 100

$\tt{Market \: \: value \: \: of \: \: 1 \: \: share = Face\:\: value\:\:of\:\: 1\:\:share + premium \times 100 } \\ \\ \tt{ = 100 + \dfrac{10}{100} \times 100} \\ \\ \tt{ = 110}$

Annual dividend = Rs. 1200

$\tt{i.) \:Total \: number\: \: of \: shares \: = {\dfrac{Total \: \: invested \: \: money}{Market \: \: value\:\: of \:\: 1 \: \:share}}} \\ \\ {\tt{ = \dfrac{8800}{110}}} \\ {\tt{ = 80}} \\ \\ {\tt{ ii.) \:The\: \: dividend \: \: percent \: \:per \: \: share}} = {\dfrac{Annual \: \: dividend}{ Total \: \: number\: \:of\: \: shares}} \times F{a}ce \: \: value\:\: of \:\: 1\:\:share} \times 100} \\\\ \tt{ =\dfrac{1200}{80 \times 100} \times 100} \\ \tt{ = 15 \: pe{r}cent}$

More Information :-

1. Money invested = Number of shares × Market value of 1 share

2. Annual income = Number of shares × Face value of 1 share × rate of dividend

3. $\tt{Return\:\: percentage=\dfrac{Income}{Investment}\times 100 }$

4. $\tt{Number\:\: of\:\: shares \:\:purchase = \dfrac{Investment}{Market\:\: value\:\: of\:\:1\:\:share}}$