A man invests Rs 1,680 in buying shares of nominal value Rs 24 and selling at 12% premium. The devidend on the shares is 15% per annum. Calculate :

(i) the number of shares he buys;

(ii) the dividend he receives annually.

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Solution

(i)Nominal value of 1 share = Rs. 24
Market value of 1 share= Rs24 + 12% of Rs. 24
= Rs. 24 + Rs. 2.88 = Rs. 26.88
Total investment = Rs 1,680
∴ No of shares purchased = $fraction numerator 1680 over denominator 26.88 end fraction$ = 62.5
(ii)Nominal value of 62.5 shares = 62.5 $\times$ 24 = Rs. 1,500
Dividend = 15% of Rs. 1,500 = Rs. 225

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A man invests Rs 1,680 in buying shares of nominal value Rs 24 and selling at 12% premium. The devidend on the shares is 15% per annum. Calculate : (i) the number of shares he buys; (ii) the dividend he receives annually.

(i)Nominal value of 1 share = Rs. 24 Market value of 1 share= Rs24 + 12% of Rs. 24 = Rs. 24 + Rs. 2.88 = Rs. 26.88 Total investment = Rs 1,680 ∴ No of shares purchased = = 62.5 (ii)Nominal value of 62.5 shares = 62.5 × 24 = Rs. 1,500 Dividend = 15% of Rs. 1,500 = Rs. 225

A man invests Rs 1,680 in buying shares of nominal value Rs 24 and selling at 12% premium. The devidend on the shares is 15% per annum. Calculate :

(i) the number of shares he buys;

(ii) the dividend he receives annually.