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.
Solution
Total investment = Rs 8,800
Nominal value of 1 share = Rs 100
Market value of 1 share = Rs 110
∴ 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%`
Is there an error in this question or solution?
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A Man Invests Rs 8,800 in Buying Shares of a Company of Face Value of Rupees Hundred Each at a Premium of 10%. Concept: Shares and Dividends.
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