Question

Mr Dsouza purchased 200 shares of face value rs 50 at a premium of rs 100 he received 50% dividend on the shares .After receiving the dividend he sold 100 shares at a discount of rs 10 and remaining shares were sold at a premium rs 75 for each trade he paid the brokerage of rs 20 find whether mr Dsouza gained or incurred a loss?By how much?

Answer 1

The amount he used to purchase the shares :

Buying at a premium is buying at a higher price than the market price.

Selling at a premium means selling at a higher price.

The shares were bought at a premium at 100.

Their buying price is thus :

200 × 100 = Rs 20000

The selling price.

He sells 100 at a discount of Rs 10.

This equals to : 50 - 10 = 40

40 × 100 = 4000

The remaining shares he sells at a premium of 75.

This equals to :

75 × 100 = 7500

We add the two :

7500 + 4000 = 11500

11500 - 20 = 11480

The dividend :

50/100 × 20000 = 10000

The total amount gained by D'Souza is :

11480 + 10000 = 21480

This shows that there is a gain of :

21480 - 20000 = 1480

Rs 1480

Answer 2

FV=₹50 and Premium=₹100
MV=FV+premium
=50 + 100
=₹150
No. of shares=200
Purchase price of 200 shares=No. of shares
×MV
=150×200
=₹30,000
Brokerage=₹20
Total investment=₹30000+₹20
=₹30020
Dividend=50%
Dividend=Rate of dividend×FV
=50% × 50
₹25
.*.Dividend on 200 shares=200×25
=₹5000
He sold 100 shares at a discount of ₹10.
MV=FV- Discount
=50-10
₹40
Selling price of 100 shares=No. of shares×MV
=100×40
₹4000
Brokerage=₹20
Amount received after selling 100 shares
=selling price - brokerage
=4000-20
=₹3980
Remaining 100 shares were sold at a premium of ₹75
MV=FV +Premium
₹50 + 75
=₹125
Selling price of 100 shares=No. of shares×MV
₹|00×125
=₹12500
Brokerage=₹20
Amount received after selling remaining 100 shares=selling price- brokerage
=12500-20
=₹12480
.*.Total amount received=5000+3980+12480
=₹21460
Total investment=₹30020
Loss=Total investment-total amount received
=₹30020-₹21460
=₹8560
.*. Mr D'souza incurred a loss of ₹8560.