Question

Calculate the percentage income in the following investment:

Rs 7,168 paying 15% when a Rs 80 share is available at 40% premium.

Answer 1

Investment = Rs 7, 168 

Nominal value of each share =Rs 80 

Market value= Rs(80 + 40 % of Rs 80) =Rs (80+32) =Rs 112 

No. of shares purchased = `7168/112 = 64`

Face value of 64 shares =Rs 80 x 64 =Rs 5, 120 

Dividend = 15 %

Therefore, Annual Income =  `(15 xx 5120)/100` = Rs 768

Hence, percentage income = `(768 xx 100)/7168` = 10.71%