1.

A man bought Rs. 40 shares at a premium of 40%. Find his income, if he invests Rs. 14,000 in these shares and receives a dividend at the rate of 8% on the face value of the shares.

Answer»

Total investment = Rs. 14,000

Nominal value of 1 share = Rs. 40

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

= Rs. 40 + Rs. 16 = Rs. 56

∴ No of shares purchased = 14,000/ 56 = 250 shares

Nominal value of 250 shares = Rs. 40 × 250 = Rs. 10,000

Dividend% = 8%

Dividend = 8% of Rs. 10,000

= (8/100) ×10,000 =Rs. 800



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