Question

A man bought Rs.40 shares at a premium of 40%. Find his income, if he invests Rs.14,000 in these shares and receives a dividend at the rate of 8% on the face value of the shares.

Answer 1

Investment=Rs.14000

N.V of each share=Rs.40

Premium=40%

$\therefore$M.V =40+40% of 40=$40+\frac{40}{100}\times 100=Rs.16+40=Rs.56$

Div%=8%

No.of share=$\frac{investmeni}{M.Vof1share}=\frac{14000}{56}=250$

His annual income=no.of share$\times$div %$\times$N.V of 1 share

$\Rightarrow 250\times \frac{8}{100}\times 40=Rs.800$