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?

Answer 1

Number of shares =50

Market value (M.V.) of each share = Rs. 132

1) Salman's investment = M.V. of each share $\times$ Number of shares
= Rs. (132 $\times$ 50)
= Rs. 6600

2) Dividend on one share = 7.5% of Rs. 100 = Rs. 7.50

His annual income = 50 $\times$ Rs. 7.50 = Rs. 375

3) Salman wants to increase his income by Rs. 150

Income on one share = Rs. 7.50

$Numberofextrasharestobebought=\frac{Increaseinannualincome}{Incomeononeshare}=\frac{150}{7.50}=20$