Question

A company, with 10,000 shares of Rs 100 each, declares an annual dividend of 5%.

(i) What is the total amount of dividend paid by the company ?

(ii) What should be the annual income of a man who has 72 shares in the company ?

Answer 1

Nominal value of 1 share = Rs. 100
Nominal value of 10,000 shares = 10,000 $\times$ Rs. 100 = Rs. 10,00,000
(i) Dividend% = 5%
Dividend = 5% of Rs. 10,00,000
= $\times$ 𝑅𝑠. 10,00,000 = Rs. 50,000

(ii) Nominal value of 72 shares = Rs. 100 $\times$ 72 = Rs. 7,200

Dividend (Annual income) = 5% of Rs. 7,200
= $\times$ 𝑅𝑠. 7,200 = Rs. 360