Question

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 the dividend, find:

1. the number of shares he has in the company.
2. the dividend per cent per share.

Answer 1

Given: Total investment = Rs 8,800

Nominal value of 1 share = Rs 100

Market value of 1 share = Rs 110

Total dividend received = Rs 1,200 

Formula: No. of shares purchased = `8800/110 = 80`

Nominal value of 80 shares = 80 × 100 = ₹ 8,000

Let dividend % = y %

then y % of Rs 8,000 = Rs 1,200

`=> "y"/100 xx 8000 = 1200`

`=> "y" = 15%`