Question

how much money will be reqired to buy 400, rupees 12.50 shares at a premium of rupees 1

Answer 1

Hi.

Here is your answer---

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Given---

Number of Shares(n) = 400

Nominal Value of One Shares(N.V.) = Rs 12.50

Market Value of One Share(M.V.) = N.V. of One Share + Premium
                                                      = 12.50 + 1
                                                      = Rs. 13.50

Sum Invested(Money Required) =  Number of Shares × M.V. of 1 Share
                                                    = 400 × 13.50
                                                    = Rs. 5400

Thus, the money required to buy 400 shares is Rs. 5400.

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Hope it helps.

Have a nice day.

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