Question

Mr. D'souza purchased 200 shares of FV ` 50 at a premium of ` 100. He

received 50% dividend on the shares. After receiving the dividend he sold 100

shares at a discount of ` 10 and remaining shares were sold at a premium

of ` 75. For each trade he paid the brokerage of ` 20. Find whether Mr.

D'souza gained or incurred a loss ? by how much ?

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Answer 1

Amount invested:

= cost of each share *number of shares purchased

=(50+100)×200

=Rs.30,000

Net income of Mr. D’souza:

= total money received on selling 200 shares + total dividend received – total brokerage paid on 3 trades

=[(50−10)×100+(50+75)×100]+200×(  $\frac{50}{100}$  ×50)−(20×3)

=4000+12500+5000−60

=16,500+5000–60

=Rs.21,440

Since the net income of Mr. D’souza is less than the amount invested, so Mr. D’souza incurred a loss.

Loss incurred = Amount invested – Net income of Mr. D’souza

                        =30,000–21,440=Rs.8560

Thus, Mr. D’souza incurred loss of Rs.8560

Answer 2

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