1.

A man buys 400 of Rs 10 shares at a premium of Rs 2.50 on each share. If the rate of dividend is 12% find(i) his investment (ii) annual dividend received by him(iii) rate of interest received by him on his money

Answer»

(i) Given Number of shares = 400 

Face value of a share Rs 10 market values of a share 

= 10 + 2.50 = Rs 12.50 

Investment = Number of shares x Market value of a share 

= Rs 400 x 12.50 = Rs 5000

(ii) Annual dividend = Number of shares x Face value x Rate of dividend 

= 400 x 10 x \(\frac{12}{100}\)

= Rs 480

(iii) Rate of dividend = \(\frac{Dividend}{Investment}\) x 100 

= \(\frac{480}{5000}\) x 100 

\(\frac{48}{5}\) 

= 9.6%



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