Mr dev invest rs 120000 in 10% rs 100 shares at 20% premium.if tax is deducted at the rate of 10%, find his annual income from his investment. later on mr dev sells half of his shares at rs 140 per share.he invests the proceeds in 15% rs 10 shares available at 20% discount. what annual income will be receive now from his investment in shares if tax is deducted at the same rate
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Answer:
9000
16312.5
Step-by-step explanation:
Mr dev invest rs 120000 in 10% rs 100 shares at 20% premium.
10% rs 100 shares => Dividend = Rs 10 per share
Bought at premium of 20% => Share purchase price = 100 + 20 = Rs 120
Number of shares bought = 120000/120 = 1000
Dividend Amount = 10 * 1000 = Rs 10000
tax is deducted at the rate of 10% = (10/100) * 10000 = Rs 1000
Annual Income = 10000 - 1000 = Rs 9000
Half shares sold = (1/2) * 1000 = 500
Amount Received = 140 * 500 = Rs 70000
Share price at 20% discount = 10 -(20/100)*10 = Rs 8
Number of shares bought = 70000/8 = 8750
Dividend per share = (15/100) * 10 = Rs 1.5
Annual Dividend = 8750*1.5 = Rs 13125
Annual Dividend from Half share left of earlier one = 10000/2 = Rs 5000
Total Annual Dividend = 13125 + 5000 = Rs 18125
Tax deducted = (10/100) * 18125 = Rs 1812.5
annual income = 18125 - 1812.5 = Rs 16312.5
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