Question

A man invests ₹ 1680 in buying shares of nominal value ₹ 25 at 12% premium. The dividend on the shares is 15% per annum.Calculate

1) the number of shares he buys

2) the dividend he receives annually

• A. 62.5 shares & ₹ 250 respectively
• B. 67.5 shares & ₹ 220 respectively
• C. 65 shares & ₹ 250 respectively
• D. 60 shares & ₹ 225 respectively

Answer 1

The correct option is D

60 shares & ₹ 225 respectively

Total Investment = ₹ 1680

N.V is ₹ 25 and selling at 12% premium

So M.V = ₹ 25 + 12% of ₹ 25

$=25+\left(\frac{12}{100}\right)\times$ 25 = ₹ 28

Amount Invested = ₹ 1680

No of share $=\frac{AmountInvested}{N.V.of1share}=\frac{₹1680}{₹28}=60$

2) the dividend he receives annually

Given Dividend = 15 % ; N.V = ₹ 25 ; Number of shares = 60

Dividend = No. of share $\times$ Dividend % $\times$ N.V

Dividend $=60\times \frac{15}{100}\times 25=₹225$