Question

The FV of a share is ₹10. What is the MV of the share if it is a 10% premium? *​

Answer 1

The FV of a share is ₹10. If it is a 10% premium, the MV of the share is Rs. 11

Given:

FV = Face Value = Nominal Value = NV, of a share = Rs. 10

Premium% of the share = 10%

To find:

Market Value (MV) of the share

Solution:

Premium amount = Premium% x Face Value

                             = Premium% x FV

                             = (10/100) x 10

                             = 1

Premium amount = Rs. 1

Market Value = Face Value + Premium amount

=> MV = FV + Premium amount

=> MV = 10 + 1

=> MV = 11

MV = Rs. 11

Hence, if FV of a share is ₹10 and if it is a 10% premium, the MV of the share is Rs. 11

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Answer 2

Answer:

premium amount = premium % ×face value

= premium%× FV

=(10/100)×16

= 1