Question

Salman buys 50 shares of face value 100 available
at 132.
(i) What is his investment?
(ii) If the dividend is 7.5%, what will be his
annual income?
(iii) If he wants to increase his annual income
by 150, how many extra shares should he
buy?
​

Answer 1

Step-by-step explanation:

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Answer 2

${ \underline{ \boxed{ \sf{ \large{ \color{red}{Given \: face \: value = Rs 100}} }}}}$

(i) Given that market value = Rs 132

And number of shares = 50

Therefore investment = number of shares × market value

= 50 × 132

${ \underline{ \boxed{ \sf{ \large{ \color{red}{Rs6600}} }}}}$

(ii) We have income per share = 7.5% of face value

= (75/ 10 × 100) × 100

${ \underline{ \boxed{ \sf{ \large{ \color{red}{Rs. 7.5}} }}}}$

Therefore annual income = 7.5 × 50

${ \underline{ \boxed{ \sf{ \large{ \color{red}{Rs375}} }}}}$

(iii) Therefore new annual income = 375 + 150 = Rs 525

Therefore number of shares = 525/7.5 = 70

Therefore, number of extra share to be increased = 70 – 50

${ \underline{ \boxed{ \sf{ \large{ \color{red}{20}} }}}}$