Mr Tiwari invested Rs 29,040 in 15% Rs 100 shares quoted at a premium of 20%. Calculate :
(i) the number of shares bought by Mr Tiwari
(ii) Mr Tiwari's income from the investment
(iii) the percentage return on his investment
[3 MARKS]

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Solution

Each subpart: 1 Mark each

(i) Market value of 1 share = Rs (100 + 20)
= Rs 120
[Given 20% premium]
No. of shares bought = $\frac{I n v e s t m e n t}{M V o f 1 s h a r e}$
$= \frac{29, 040}{120} = 242$
(ii) Dividend per share = Rs 15
Total dividend $= R s (15 \times 242) = R s 3630$
Hence, Tiwari's income from investment is Rs 3630
(iii) Percentage return = $(\frac{3630}{29040} \times 100) %$
$12.5 %$

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Mr Tiwari invested Rs 29,040 in 15% Rs 100 shares quoted at a premium of 20%. Calculate : (i) the number of shares bought by Mr Tiwari (ii) Mr Tiwari's income from the investment (iii) the percentage return on his investment [3 MARKS]

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(i) the number of shares bought by Mr Tiwari
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(iii) the percentage return on his investment
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