Mr. prakash 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 Premium of Rs.20, find:

The annual dividend.

The profit earned including his dividend.

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Solution

Market value of one share = 100 –20 = 80, investment = 52000.
∴ The number of shares bought = 52000/80
= 650.
(i) The annual dividend = number of shares × rate of dividend
× face value of one share
= 650 ×8/100× 100 = 5200.

(ii) As Mr. Parekh sells his shares at a premium of 20,
the market value of one share = 100 + 20 = 120.
∴ The selling value of his 650 shares = `(120 × 650)
= 78000.
∴ Profit earned including his dividend
= selling value + dividend – investment
= 78000 + 5200 – 52000
= 31200.

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Mr. prakash 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 Premium of Rs.20, find: The annual dividend. The profit earned including his dividend.

Mr. prakash 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 Premium of Rs.20, find:

The annual dividend.

The profit earned including his dividend.