Question

A man wants to buy 120 shares available at ₹ 88 ( par value = ₹ 50)

i) How much should he invest ?

ii) If the dividend is 8.5 % , what will be his annual income ?

• A. ₹ 10600 (ii) ₹ 450
• B. i) ₹ 10060 ii) ₹ 560
• C. i) ₹ 10560 (ii) ₹ 510
• D. i) ₹ 10650 (ii) ₹ 500

Answer 1

The correct option is C

i) ₹ 10560 (ii) ₹ 510

Number of shares = 120 ; M.V of each share = ₹ 88

Hence the total investment = Number of shares x M.V of each share

= 120 $\times$ 88

= ₹ 10560

ii) Annual Income = Dividend % $\times$ Number of Shares $\times$ N.V of each Share

Dividend % = 8.5 ; Number of Shares = 120 and N.V of each Share = ₹ 50

Annual Income = 8.5 % $\times$ 120 $\times$ 50

= $\frac{8.5}{100}$ $\times$ 120 $\times$ 50

= ₹ 510