Question

Salman buys 50 share of face value Rs100 available at Rs132. What is his investment? If the dividend is 7.5%p.a., what will be his annual income?​

Answer 1

Number of shares=50

Face value of each share=Rs.100

Market value of each share=Rs.132

Total face value=Rs.100×50

=Rs.5,000

(i) Total investment=Rs.132×50

=Rs.6,600

(ii) Rate of dividend =7.5%

$\small\bold{Annual \: income=Rs. \frac{5000 \times 7.5}{100} = Rs.375}$

(iii) Let extra share should he buy be x.

then total number of shares=50+x

Total face value=Rs.100×(50+x)

∴ Annual income=

$\bold{Rs. \frac{100 \times (50 + x) \times 7.5}{100}}$

=(50+x)×7.5

∴(50+x)×7.5=375+150

$\bold{50+x= \frac{525}{7.5} = 70}$

x=70−50=20

Hence, the extra shares should be buy=20.