Question

Kapil invests Rs 9000 in a company paying a dividend of 6% per annum when a share of NV Rs 100 stands at Rs 150. What is his annual income? If he sells 505 of his shares when the price rises to Rs 200, what is his gain in this transaction?
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Answer 1

Information provided with us:

• Kapil invests Rs 9000 in a company
• Dividend is of 6%
• Share of NV Rs 100 stands at Rs 150
• He sells his 505 of his shares , when prise was raised to Rs.200

What we have to calculate:

• His gain in this transaction?

Required Solution:

______________

Using Formula,

➺ No. of shares = Investment / M.V. on 1 share

We have,

• MV on 1 share = Rs.150
• Investment = Rs.9000

Putting the values in the formula of no. of shares,

➺ No. of shares = 9000 / 150

➺ No. of shares = 900 / 15

➺ No. of shares = 300 / 5

➺ No. of shares = 60

Finding out income on one share (i.e., NE):

➺ Income on 1 share = 6% of Rs.100

➺ Income on 1 share = 6/100 × 100

➺ Income on 1 share = 6 × 1

➺ Income on 1 share = 6

• Therefore, income one 1 share is of Rs.6

Finding out income:

• As the income on one share is Rs.6 and number of shares are 60. So, in order to get the annual income we would multiply both of them.

➺ Income = 60 × 6

➺ Income = 360

• Therefore, annual income of Kapil is of Rs.360

Now,

• As their were total 60 shares so half of his shares would be 30. So we would be finding out the money that Kapil would get on selling them. And also we would find out the cost of those shares and at last subtract both of the cost and he would get the gain.

Price rises to Rs.200,

➺ Money he got = 30 × 200

➺ Money he got = 6000

Cost:

➺ Cost of shares = 30 × 150

➺ Cost of shares = 4500

At last finding out gain in that transaction,

➺ Gain = 6000 - 4500

➺ Gain = 1500

• Henceforth, kapil gained of Rs.1500 in that transaction.