1.

A man invests Rs. 1,680 in buying shares of nominal value Rs. 24 and selling at 12% premium. The dividend on the shares is 15% per annum. Calculate:(i) the number of shares he buys;(ii) the dividend he receives annually.

Answer»

Nominal value of 1 share = Rs. 24

Market value of 1 share= Rs24 + 12% of Rs. 24

= Rs. 24 + Rs. 2.88 = Rs. 26.88

Total investment = Rs1,680

∴ No of shares purchased = 1,680/26.88=62.5

Nominal value of 62.5 shares = 62.5 × 24 = Rs. 1,500

Dividend = 15% of Rs. 1,500

= Rs. 225



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