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

B

i) ₹ 9600  (ii) 200  (iii) ₹  1800

C

i) ₹ 9500  (ii) 150  (iii) ₹  18

D

i) ₹ 9000  (ii) 100  (iii) ₹  900

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                         = ₹ 1800Mathematics

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