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 year as dividend, find:

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

Answer 1

Investment = Rs. 8,800

Face value of each share = Rs. 100

And market value of each share

= Rs. 100 + Rs. 10

= Rs. 110

Total income = Rs. 1200

Total face value

= `"Rs."(8800 xx 100)/(110)`

= Rs. 8000

i. No. of shares 

= `(8000)/(100)`

= 80

ii. Rate of dividend

= `(1200 xx 100)/(8000)`

= 15%