Question

Salman buys 50 shares of face value Rs 100 available at Rs 132.
(i) What is his investment?
(ii) If the dividend is 7.5%, what will be his annual income?
(iii) If he wants to increase his annual income by Rs 150, how many extra shares should he buy?
[4 MARKS]

Answer 1

part (i) : 1 Mark
part (ii): 1 Mark
part (ii): 2 Marks

(i) Investment = $50\times 132=Rs6600$
(ii) Annual dividend $=\frac{7.5}{100}\times 100\times 50$
= Rs 375
(iii) Dividend on 1 share $=\frac{7.5}{100}\times 100$
= Rs 7.50
$\therefore$ Number of shares, whose dividend is
$Rs150=\frac{150}{7.50}=20shares$
So, he should by 20 more shares to increase his annual income by Rs 150.