1.

A man bought Rs. 40 shares at a discount of 40%. Find his income, if he invests Rs. 12,000 in these shares and receives a dividend at the rate of 11% on the face value of the shares.

Answer»

Solution 2:

Total investment = Rs.12,000

Nominal value of 1 share = Rs.40

Market value of 1 share = Rs. 40 − 40% of Rs. 40

= Rs. 40 – Rs. 16 = Rs. 24

∴ No of shares purchased = 12,000/24 = 500 shares

Nominal value of 500 shares = Rs. 40 × 500 = Rs. 20,000

Dividend % = 11%

Dividend = 11% of Rs. 20,000

= (11/100) × 20,000= Rs. 2,200



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