Question

A man invested Rs 45,000 in 15% Rs 100 shares quoted at Rs 125. When the M.V. of these shares rose to Rs 140, he sold some shares, just enough to raise Rs 8,400 .Calculate :

(i) the number of shares he still holds;

(ii) the dividend due to him on these remaining shares.

Answer 1

(i)
Total investment = Rs. 45,000
Market value of 1 share = Rs. 125
∴ No of shares purchased =
= 360 𝑠ℎ𝑎𝑟𝑒𝑠
Nominal value of 360 shares = Rs. 100 $\times$ 360 = Rs. 36,000
Let no. of shares sold = n
Then sale price of 1 share = Rs. 140
Total sale price of n shares = Rs. 8,400
Then n = = 60 𝑠ℎ𝑎𝑟𝑒𝑠
The no. of shares he still holds = 360 – 60 = 300

(ii)
Nominal value of 300 shares = Rs. 100 $\times$ 300 = Rs. 30,000
Dividend% = 15%
Dividend = 15% of Rs. 30,000
= $\times$ Rs. 30,000 = Rs. 4,500