Question

Find the annual dividend received by Anil for his 200 preferred shares and 1,000 common shares, both of par value of ₹ 100 each, if the dividend declared on a preferred share is 10% per annum and an annual dividend of `12 1/2%` on the common shares.

Answer 1

Given:

Preferred shares: 200 shares, dividend = 10%

Common shares: 1000 shares, dividend = `12 1/2%` = 12.5%

Par value for all shares = ₹ 100

Dividend on preferred shares

= 200 × (10% of ₹ 100)

= 200 × ₹ 10

= ₹ 2000

Dividend on common shares

= 1000 × (12.5% of ₹ 100)

= 1000 × ₹ 12.50

= ₹ 12,500

Total annual dividend

₹ 2000 + ₹ 12500

= ₹ 14,500