A man invests Rs 20020 in buying shares of nominal value Rs 26 at $10 %$ premium. The dividend on the shares is $15 %$ per annum. Calculate the number of shares he buys.

700

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7000

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500

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600

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Solution

The correct option is A
700

Total investment = Rs 20020

Face value of 1 share = Rs 26

Premium on 1 share = $10 %$ of Rs 26 $= R s (\frac{10}{100}) \times 26 = R s 2.6$

Market value of 1 share = Rs $(26 + 2.6)$ = Rs28.6

The number of shares bought by the person $= \frac{T o t a l i n v e s t m e n t}{M a r k e t v a l u e o f 1 s h a r e}$

$= \frac{20020}{28.6} = 700$

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