Question

mrs kakaria invests Rs.9800 in a company paying a dividend of 8% per annum when a share of face value Rs.100 stands at Rs.140. What is his annual income? If he sells 50% of her shares when the price rises to Rs.180,what is her gain in this transaction?

Answer 1

Kakarayya Actually who is he

Answer 2

Find the number of shares Mrs Kakaria owned:

Number of shares bought = 9800 ÷ 140 = 70

Find the dividends:

Dividends are paid on face value

1 share = 8% of Rs 100 = 0.08 x 100 = Rs 8.00

70 shares = 8 x 70 = Rs 560

⇒ Annual income = Rs 560

Find the gain from selling 50% of the shares:

Number of shares sold = 50% of 70 = 0.5 x 70 = 35

Gain on 1 share = 180 - 140 = Rs 40

Gain on 35 shares = 40 x 35 = Rs 1400

⇒ Total Gain = Rs 1400

Answer: Annual income = Rs 560,  Gain = Rs 1400