Question

A man invests Rs 8800 in buying shares of a company of nominal value of Rs 100 each at a premium of 10%. If he earns Rs 1200 at the end of each year as dividend, find:

1) No. Of shares he has in the company

2) the dividend percent per share.

Answer 1

Investment = Rs8800,
Market value of 1 share = Rs100 + 10% of Rs100 = Rs110.

1. No of shares = Rs8800/Rs110 = 80. [Ans.]
   
2. Face value of 80 shares = Rs100×80 = Rs8000.
   Dividend = Rs1200 ,
   Percentage dividend = (Dividend/face value of shares)×100
   = (1200/8000)×100
   = 15%. [Ans.]