Question

Rohan buys, 600, ₹ 200 share at ₹ 20 premium in a company paying 10% dividend. Then his annual income & percentage income will be

• A. ₹ 12000, 9.09 % respectively
• B. ₹ 8000,6.18 % respectively
• C. ₹ 6000, 8.09 % respectively
• D. ₹ 8000, 10.09 % respectively

Answer 1

The correct option is A

₹ 12000, 9.09 % respectively

Market value (M.V) of 1 share = ₹ 220

Market value of 600 shares = 600 $\times$ 220 = ₹ 1, 32, 000

His annual income will be given by

Annual income = No of shares $\times$ Rate of dividend $\times$ N.V of share

Annual income = $600\times \frac{10}{100}\times 200=₹12000$

₹ 6000 is obtained on investing ₹ 1, 32, 000

Percentage income = $\frac{12000}{1,32,000}$ $\times$ 100 = 9.09 %