Question

A man invested Rs 45,000 in $45\%$ Rs 100 shares quoted at Rs 125. When the market value 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.
[4 MARKS]

Answer 1

Each subpart: 2 Marks each

Face value of each share = Rs 100
Market value of each share = Rs 125
Investment = Rs 45,000
$\therefore$ Number of shares purchased = $\frac{45000}{125}=360$
Now increased market value = Rs 140
Amount raised by selling few shares = Rs 8,400
No. of shares sold = $\frac{8400}{140}=60$
(i) No. of shares he still holds = 360 - 60 = 300
(ii) Amount on which dividend will be received = 300 $\times$ 100 = Rs. 30,000
Dividend due to him = $15\%$ of Rs 30,000 = Rs 4,500