A man invests Rs 22,500 in Rs 50 shares available at 10% discount. I

1.	A man invests Rs 22,500 in Rs 50 shares available at 10% discount. If the dividend paid by the company is 12%c, calculate : (i) The number of shares purchased. (ii) The annual dividend received. (iii) The rate of return he gets on his investment. Give your answer correct to the nearest whole number.
Answer» Total investment = Rs 22,500 Face value of a share = Rs 50 Market value of a share = Rs (50 – 10% of 50) = Rs (50 – 5) = Rs 45 ∴ No. of shares purchased = 22500/45 = 500 Annual dividend per share = 12 % of 50 = (12/100) x 50 = Rs 6 Total annual dividend = Rs 6 × 500 = Rs 3000 Rate of return = (3000/22500) × 100 = 13.3 % = 13% (Nearest whole number) Hence, number of shares purchased are 500, total annual dividend is Rs 3000 and rate of return on investment is nearly 13 % p. a.

A man invests Rs 22,500 in Rs 50 shares available at 10% discount. If the dividend paid by the company is 12%c, calculate : (i) The number of shares purchased. (ii) The annual dividend received. (iii) The rate of return he gets on his investment. Give your answer correct to the nearest whole number.

Answer»

Total investment = Rs 22,500

Face value of a share = Rs 50

Market value of a share = Rs (50 – 10% of 50) = Rs (50 – 5) = Rs 45

∴ No. of shares purchased = 22500/45 = 500

Annual dividend per share = 12 % of 50 = (12/100) x 50 = Rs 6

Total annual dividend = Rs 6 × 500 = Rs 3000

Rate of return = (3000/22500) × 100 = 13.3 %

= 13% (Nearest whole number)

Hence, number of shares purchased are 500, total annual dividend is Rs 3000 and rate of return on investment is nearly 13 % p. a.