A man invests Rs. 22,500 in Rs. 50 shares available at 10% discount. If the dividend paid by the company is 12%, calculate:

1) The number of shares purchased

2) The annual dividend received.

3) The rate of return he gets on his investment. Give your answer correct to the nearest whole number.

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#### Solution

Total investment = Rs.22,500

Face value = Rs.50

Discount = `10/100 xx 50` = Rs 5

Market value = Face value - discount = Rs.45

Total shares purchased = `22500/45 = 500`

Total dividend = `12/100 xx 50 xx 500 = 3000`

Rateof return = `3000/22500 xx 100 = 13.33% ~~ 13%`

Concept: Shares and Dividends Examples

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