Question

A man invests 8,800 in buying shares of a company of face value of rupees hundred each at a premium of 10%. If Rs.1,200 at the end of the year as dividend

find :

(i) the number of shares he has: company.
ii) the dividend percent per share.

Answer 1

Face value of $1$ share $=$Rs. $100$

Market value of $1$ share $=$Rs. $(100+\frac{10}{100}\times 100)$

$=$Rs. $(100+10)$

$=$Rs. $110$

Investment $=$Rs. $8,800$

Annual dividend $=$Rs. $1200$

(i) Total number of shares $=\frac{8800}{110}=80$ shares

(ii) Dividend percentage per share $=\frac{1200}{80\times 100}\times 100$

$=15\%$.