Question

A man invests ₹ 8000 in buying shares of a company of face value of rupees hundred each at a premium of 10%. If he earns ₹ 1200 at the end of the year as dividend, then find the i) number of shares he has in company and ii) dividend percent per share

• A. 110 & 8% respectively
• B. 90 & 12% respectively
• C. 120 & 15% respectively
• D. 80 & 15% respectively

Answer 1

The correct option is D

80 & 15% respectively

Face value is given as ₹ 100 (N.V) ; Sold at 10 % premium

So Market value (M.V) $=100+\frac{10}{100}\times 100=110$

Amount Invested = ₹ 8800

No. of share he bought $=\frac{AmountInvested}{M.Vof1share}=\frac{₹8800}{₹110}=80$

Now Total amount he got at end of year= ₹ 1200

So Total amount = No. of share $\times$ Dividend % $\times$ M.V

$\Rightarrow 1200=80\times Dividend\%\times 100$

$\Rightarrow 1200=80\times \frac{r}{100}\times 100$

$r=15\%$