Question

A man wants to buy 62 shares available at *132 (par value of 100),
(1) How much should he invest?
(2)If the dividend is 7.5%, what will be his annual income?
(3)If he wants to increase his annual income by 150, how many extra shares should
he buy?​

Answer 1

${ \underline{ \boxed{ \sf{ \large{ \color{red}{Given \: face \: value = Rs 100}} }}}}$

(i) Given that market value = Rs 132

And number of shares = 50

Therefore investment = number of shares × market value

= 50 × 132

${ \underline{ \boxed{ \sf{ \large{ \color{red}{Rs6600}} }}}}$

(ii) We have income per share = 7.5% of face value

= (75/ 10 × 100) × 100

${ \underline{ \boxed{ \sf{ \large{ \color{red}{Rs. 7.5}} }}}}$

Therefore annual income = 7.5 × 50

${ \underline{ \boxed{ \sf{ \large{ \color{red}{Rs375}} }}}}$

(iii) Therefore new annual income = 375 + 150 = Rs 525

Therefore number of shares = 525/7.5 = 70

Therefore, number of extra share to be increased = 70 – 50

${ \underline{ \boxed{ \sf{ \large{ \color{red}{20}} }}}}$