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Question

Mr. Sharma has 60 shares of nominal value of ₹ 100 and he decides to sell them when they are a premium of 60 %. He invests the proceeds in shares of nominal value ₹ 50, quoted at 4 % discount, paying 18% dividend annually. Calculate :

(i) the sale proceeds 

(ii) the number of shares he buys

(iii) his annual dividend from these shares 

 

 



A

i) 9800  (ii) 200  (iii) ₹  1700

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B

i) ₹ 9600  (ii) 200  (iii) ₹  1800

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C

i) ₹ 9500  (ii) 150  (iii) ₹  18

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D

i) ₹ 9000  (ii) 100  (iii) ₹  900

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Solution

The correct option is C

i) ₹ 9600  (ii) 200  (iii) ₹  1800


Given that the Number of shares bought = 60
N.V of each share = ₹ 100
M.V of each share = 60 %  Premium 
                              = ₹ 160

Hence the sale proceed = 60 x 160
                                        = ₹ 9600

ii) The N.V of the new share = ₹ 50
M.V of the new share = 4 % discount
                                   = ₹ 48

Hence number of shares bought = 960048
                                                    = 200

iii) Given that the dividend = 18 % 
Hence the dividend on one share = 18100 × 50
                                                      = ₹ 9

Annual Income = Number of shares bought x dividend on one share
                        =   200  x ₹ 9
                        = ₹ 1800


Mathematics

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