20 + Interview Questions in SHARES IN GENERAL AWARENESS Page 1 InterviewSolution

1.	Which is the better investment:16% Rs. 100 shares at 80 or 20% Rs.100 shares at 120?
Answer» 1^st case 16% Rs.100 shares at 80 means; Market value of 1 share = Rs. 80 Nominal value of 1 share = Rs. 100 Dividend = 16% Income on Rs. 80 = 16% of Rs. 100 = Rs. 16 Income on Rs. 1 = 16/80=Rs.0.20 2^nd case 20% Rs. 100 shares at 120 means; Market value of 1 share = Rs. 120 Nominal value of 1 share = Rs. 100 Dividend = 20% Income on Rs. 120 = 20% of Rs. 100 = Rs. 20 Income on Rs. 1 = 20/120=Rs.0.17 Then 16% Rs. 100 shares at 80 is better investment.

1.

Which is the better investment:16% Rs. 100 shares at 80 or 20% Rs.100 shares at 120?

Answer»

1^st case

16% Rs.100 shares at 80 means;

Market value of 1 share = Rs. 80

Nominal value of 1 share = Rs. 100

Dividend = 16%

Income on Rs. 80 = 16% of Rs. 100 = Rs. 16

Income on Rs. 1 = 16/80=Rs.0.20

2^nd case

20% Rs. 100 shares at 120 means;

Market value of 1 share = Rs. 120

Nominal value of 1 share = Rs. 100

Dividend = 20%

Income on Rs. 120 = 20% of Rs. 100 = Rs. 20

Income on Rs. 1 = 20/120=Rs.0.17

Then 16% Rs. 100 shares at 80 is better investment.

Discussion

2.	A company, with 10,000 shares of Rs. 100 each, declares an annual dividend of 5%.(i) What is the total amount of dividend paid by the company?(ii) What should be the annual income of a man who has 72 shares in the company?(iii) If he received only 4% of his investment, find the price he paid for each share.
Answer» Nominal value of 1 share = Rs. 100 Nominal value of 10,000 shares = 10,000 × Rs. 100 = Rs. 10,00,000 (i) Dividend% = 5% Dividend = 5% of Rs. 10,00,000 = (5/100) × Rs.10,00,000 = Rs. 50,000 (ii) Nominal value of 72 shares = Rs. 100 × 72 = Rs. 7,200 Dividend = 5% of Rs. 7,200 = (5/100) × Rs.7,200 = Rs. 360 (iii) Let market value of 1 share = Rs y Then market value of 10,000 shares = Rs. (10,000y) Return% = 4% 4% of Rs. (10,000y) = Rs. 50,000 ⟹ (4/100) ×10,000 = Rs.50,000 ⟹ y = Rs. 125.

2.

A company, with 10,000 shares of Rs. 100 each, declares an annual dividend of 5%.(i) What is the total amount of dividend paid by the company?(ii) What should be the annual income of a man who has 72 shares in the company?(iii) If he received only 4% of his investment, find the price he paid for each share.

Answer»

Nominal value of 1 share = Rs. 100

Nominal value of 10,000 shares = 10,000 × Rs. 100 = Rs. 10,00,000

(i) Dividend% = 5%

Dividend = 5% of Rs. 10,00,000

= (5/100) × Rs.10,00,000 = Rs. 50,000

(ii) Nominal value of 72 shares = Rs. 100 × 72 = Rs. 7,200

Dividend = 5% of Rs. 7,200

= (5/100) × Rs.7,200 = Rs. 360

(iii) Let market value of 1 share = Rs y

Then market value of 10,000 shares = Rs. (10,000y)

Return% = 4%

4% of Rs. (10,000y) = Rs. 50,000

⟹ (4/100) ×10,000 = Rs.50,000

⟹ y = Rs. 125.

Discussion

3.	A sum of rupees 11,880 is invested in Rs. 50 shares available at 12% discount. Find the income, if a dividend of 12% is given on the shares.
Answer» Total investment = Rs. 11,880 Nominal value of 1 share = Rs. 50 Market value of 1 share = Rs. 50 − 12% of Rs. 50 = Rs. 50 – Rs. 6 = Rs. 44 ∴ No of shares purchased = 11,880/44 = 270 shares Nominal value of 270 shares = Rs. 50 × 270 = Rs. 13,500 Dividend% = 12% Dividend = 12% of Rs. 13,500 = (12/100) × 13,500= Rs. 1,620

3.

A sum of rupees 11,880 is invested in Rs. 50 shares available at 12% discount. Find the income, if a dividend of 12% is given on the shares.

Answer»

Total investment = Rs. 11,880

Nominal value of 1 share = Rs. 50

Market value of 1 share = Rs. 50 − 12% of Rs. 50

= Rs. 50 – Rs. 6 = Rs. 44

∴ No of shares purchased = 11,880/44 = 270 shares

Nominal value of 270 shares = Rs. 50 × 270 = Rs. 13,500

Dividend% = 12%

Dividend = 12% of Rs. 13,500

= (12/100) × 13,500= Rs. 1,620

Discussion

4.	A company declares 8 per cent dividend to the share holders. If a man receives Rs. 2,840 as his dividend, find the nominal value of his shares.
Answer» Dividend% = 8% Dividend = Rs. 2,840 Let nominal value of shares = Rs. y 8% of y = Rs. 2,840 ⟹ (8/100) ×y=Rs.2,840 ⟹ y = Rs. 35,500

4.

A company declares 8 per cent dividend to the share holders. If a man receives Rs. 2,840 as his dividend, find the nominal value of his shares.

Answer»

Dividend% = 8%

Dividend = Rs. 2,840

Let nominal value of shares = Rs. y

8% of y = Rs. 2,840

⟹ (8/100) ×y=Rs.2,840

⟹ y = Rs. 35,500

Discussion

5.	Rs. 50 shares of a company are quoted at a discount of 10%. Find the rate of dividend given by the company, the return on the investment on these shares being 20 per cent.
Answer» Nominal value of 1 share = Rs. 50 Market value of 1 share = Rs. 50 − 10% of Rs. 50 = Rs. 50 – Rs. 5 = Rs. 45 Profit % on investment = 20% Then profit on 1 share = 20% of Rs. 45 = Rs. 9 ∴ Dividend % = (9/50) ×100%=18% Ans.

5.

Rs. 50 shares of a company are quoted at a discount of 10%. Find the rate of dividend given by the company, the return on the investment on these shares being 20 per cent.

Answer»

Nominal value of 1 share = Rs. 50

Market value of 1 share = Rs. 50 − 10% of Rs. 50

= Rs. 50 – Rs. 5 = Rs. 45

Profit % on investment = 20%

Then profit on 1 share = 20% of Rs. 45 = Rs. 9

∴ Dividend % = (9/50) ×100%=18% Ans.

Discussion

6.	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

6.

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

Discussion

7.	A man invests Rs. 8,800 in buying shares of a company of face value of rupees hundred each at a premium of 10%. If he earns Rs. 1,200 at the end of the year as dividend, find:(i) the number of shares he has in the company.(ii) the dividend percent per shares.
Answer» Total investment = Rs. 8,800 Nominal value of 1 share = Rs. 100 Market value of 1 share = Rs. 110 ∴ No of shares purchased = 8800/110=80 Nominal value of 80 shares = 80 × 100 = Rs. 8,000 Let dividend % = y % Then y% of Rs. 8,000 = Rs. 1,200 ⟹ (/100) ×8,000=.1,200 ⟹ y = 15%

7.

A man invests Rs. 8,800 in buying shares of a company of face value of rupees hundred each at a premium of 10%. If he earns Rs. 1,200 at the end of the year as dividend, find:(i) the number of shares he has in the company.(ii) the dividend percent per shares.

Answer»

Total investment = Rs. 8,800

Nominal value of 1 share = Rs. 100

Market value of 1 share = Rs. 110

∴ No of shares purchased = 8800/110=80

Nominal value of 80 shares = 80 × 100 = Rs. 8,000

Let dividend % = y %

Then y% of Rs. 8,000 = Rs. 1,200

⟹ (/100) ×8,000=.1,200

⟹ y = 15%

Discussion

8.	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

8.

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

Discussion

9.	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

9.

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

Discussion

10.	Mrs. Sharma buys 85 shares (par value Rs. 100) at Rs. 150 each.(i) If the dividend is 6.5%, what will be her annual income?(ii) If she wants to increase her income by Rs. 260; how much more should she invest?
Answer» Par value of 85 shares = Rs. 100 × 85 = Rs. 8,500 Market value of 85 shares = Rs. 150 × 85 = Rs. 12,750 (i) Dividend% = 6.5% Dividend = 6.5% of Rs. 8,500 = (6.5/100) × 8,500 = Rs. 552.50 Ans (ii) Required income = Rs. 552.50 + Rs. 260 = Rs. 812.50 If income is Rs. 552.50,then investment is Rs. 12,750 If income is Rs. 812.50, then investment is = (12,750/552.50) ×812.50 = Rs. 18,750 More investment required = Rs. 18,750 – Rs. 12,750 = Rs. 6,000 Ans

10.

Mrs. Sharma buys 85 shares (par value Rs. 100) at Rs. 150 each.(i) If the dividend is 6.5%, what will be her annual income?(ii) If she wants to increase her income by Rs. 260; how much more should she invest?

Answer»

Par value of 85 shares = Rs. 100 × 85 = Rs. 8,500

Market value of 85 shares = Rs. 150 × 85 = Rs. 12,750

(i) Dividend% = 6.5%

Dividend = 6.5% of Rs. 8,500

= (6.5/100) × 8,500 = Rs. 552.50 Ans

(ii) Required income = Rs. 552.50 + Rs. 260 = Rs. 812.50

If income is Rs. 552.50,then investment is Rs. 12,750

If income is Rs. 812.50, then investment is = (12,750/552.50) ×812.50

= Rs. 18,750

More investment required = Rs. 18,750 – Rs. 12,750

= Rs. 6,000 Ans

Discussion

11.	How much money will be required to buy 200, Rs. 25 shares at a premium of Rs. 2?
Answer» Nominal value of 1 share = Rs. 25 Market value of 1 share = Rs. 25 + Rs. 2 = Rs. 27 No. of shares purchased = 200 Money required to buy 200 shares = Rs. 27 × 200 = Rs. 5,400 Ans.

11.

How much money will be required to buy 200, Rs. 25 shares at a premium of Rs. 2?

Answer»

Nominal value of 1 share = Rs. 25

Market value of 1 share = Rs. 25 + Rs. 2 = Rs. 27

No. of shares purchased = 200

Money required to buy 200 shares = Rs. 27 × 200

= Rs. 5,400 Ans.

Discussion

12.	How much money will be required to buy 125, Rs. 30 shares at a discount of Rs. 3?
Answer» Nominal value of 1 share = Rs. 30 Market value of 1 share = Rs. 30 – Rs. 3 = Rs. 27 No. of shares purchased = 125 Money required to buy 125 shares = Rs. 27 × 125 = Rs. 3,375 Ans

12.

How much money will be required to buy 125, Rs. 30 shares at a discount of Rs. 3?

Answer»

Nominal value of 1 share = Rs. 30

Market value of 1 share = Rs. 30 – Rs. 3 = Rs. 27

No. of shares purchased = 125

Money required to buy 125 shares = Rs. 27 × 125

= Rs. 3,375 Ans

Discussion

13.	Fill in the blanks:Capital reserve is shown on the _______ of the balance sheet.
Answer» Capital reserve is shown on the liabilities side of the balance sheet .

Discussion

14.	Fill in the blanks:The part of called up capital, which is paid by the shareholders is known as ______
Answer» The part of called up capital, which is paid by the shareholders is known as Paid up capital.

Discussion

15.	Fill in the blanks:The part of subscribed capital which is uncalled is known as _________
Answer» The part of subscribed capital which is uncalled is known as reserve capital.

Discussion

16.	Fill in the blanks:_________can be converted into equity.
Answer» Preference shares can be converted into equity.

Discussion

17.	Fill in the blanks: A company may______its Equity or undertake capital reduction.
Answer» A company may buy back its Equity or undertake capital reduction.

Discussion

18.	Fill in the blanks:All the share capital which is not preference share capital is ______ share capital.
Answer» All the share capital which is not preference share capital is equity share capital.

Discussion

19.	Fill in the blanks:The preference shares, that have right to participate in surplus profit of the company are called ______ preference shares.
Answer» The preference shares, that have right to participate in surplus profit of the company are called participating preference shares.

Discussion

20.	Fill in the blanks:Preference shares are those shares which have _______over other classes of shares in respect of dividend at a fixed rate or a fixed amount before any dividend on equity shares.
Answer» Preference shares are those shares which have preferential right over other classes of shares in respect of dividend at a fixed rate or a fixed amount before any dividend on equity shares.

Discussion

Explore topic-wise InterviewSolutions in .

Which is the better investment:16% Rs. 100 shares at 80 or 20% Rs.100 shares at 120?

A sum of rupees 11,880 is invested in Rs. 50 shares available at 12% discount. Find the income, if a dividend of 12% is given on the shares.

A company declares 8 per cent dividend to the share holders. If a man receives Rs. 2,840 as his dividend, find the nominal value of his shares.

Rs. 50 shares of a company are quoted at a discount of 10%. Find the rate of dividend given by the company, the return on the investment on these shares being 20 per cent.

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.

A man invests Rs. 8,800 in buying shares of a company of face value of rupees hundred each at a premium of 10%. If he earns Rs. 1,200 at the end of the year as dividend, find:(i) the number of shares he has in the company.(ii) the dividend percent per shares.

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.

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.

Mrs. Sharma buys 85 shares (par value Rs. 100) at Rs. 150 each.(i) If the dividend is 6.5%, what will be her annual income?(ii) If she wants to increase her income by Rs. 260; how much more should she invest?

How much money will be required to buy 200, Rs. 25 shares at a premium of Rs. 2?

How much money will be required to buy 125, Rs. 30 shares at a discount of Rs. 3?

Fill in the blanks:Capital reserve is shown on the _______ of the balance sheet.

Fill in the blanks:The part of called up capital, which is paid by the shareholders is known as ______

Fill in the blanks:The part of subscribed capital which is uncalled is known as _________

Fill in the blanks:_________can be converted into equity.

Fill in the blanks: A company may______its Equity or undertake capital reduction.

Fill in the blanks:All the share capital which is not preference share capital is ______ share capital.

Fill in the blanks:The preference shares, that have right to participate in surplus profit of the company are called ______ preference shares.

Fill in the blanks:Preference shares are those shares which have _______over other classes of shares in respect of dividend at a fixed rate or a fixed amount before any dividend on equity shares.