Mr. Michel invested Rs 52000 on Rs 100 shares at a discount of Rs 20 paying $8 %$ dividend. At the end of one year he sells the shares at a premium of Rs 20. Find his annual dividend.

Rs 80000

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Rs 6000

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Rs 52000

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Rs 5200

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Solution

The correct option is D
Rs 5200

Face value of one share = Rs 100

Market value of one share = $80 %$ of Rs 100

= 80/100 $\times$ 100 = Rs 100

Investment = Rs 52000

Number of shares purchased = 52000/80 = 650

Total face value = Rs 650 $\times$ 100 = Rs 65000

Annual dividend = $8 %$ of Rs 65000

= 8/100 $\times$ 65000 = Rs 5200.

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Mr. Michel invested Rs 52000 on Rs 100 shares at a discount of Rs 20 paying 8% dividend. At the end of one year he sells the shares at a premium of Rs 20. Find his annual dividend.

Mr. Michel invested Rs 52000 on Rs 100 shares at a discount of Rs 20 paying $8 %$ dividend. At the end of one year he sells the shares at a premium of Rs 20. Find his annual dividend.