Advertisements
Advertisements
Question
Amitesh had 400 shares of Rs 100 each of 'Telco' paying a dividend of 12.5%. He sold them at a market price of Rs 125 and invested the proceeds in Rs 50 shares of 'Adani Motors' available in the market at Rs 80 and paying a dividend of 16%. How many shares of Adani Motors did Amitesh buy and what is the change in his annual income?
Advertisements
Solution
In first case: No. of shares sold = 400
Face value of each share = Rs 100
Face value of 400 shares =Rs ( 100 x 400) =Rs 40,000
Market value of each share = Rs 125
Market value of 400 shares =Rs ( 125 x 400) =Rs 50,000
Dividend (income) for 400 shares = 12.5 % of Rs 40,000 = Rs `(12.5 xx 40000)/100` = Rs 5000
In second case:
Proceeds from selling 400 shares =Rs 50,000
Face value of each share =Rs 50
Market value of each share = Rs 80
No. of shares bought = `50000/80 = 625`
Amitesh bought 625 shares of Rs 80 each.
Face value of 625 shares = Rs ( 50 x 625) = Rs 31,250
Dividend (income) for 625 shares = 16 % of Rs 31,250 = Rs `(16 xx 31250)/100` = Rs 5000
Change in annual income =Rs (5,000 - 5,000) =Rs 0 =Nil
APPEARS IN
RELATED QUESTIONS
Rajat buys Rs. 80 shares at 30% premium in a company paying 18% dividend. Find:
(i) The market value of 150 shares.
(ii) Rajat’s annual income from these shares.
(iii) Rajat’s percentage return from this investment.
Mr. Gupta has a choice to invest in ten-rupee shares of two firm at Rs. 13 or at Rs. 16. If the first firm pays 5% dividend and the second firm pays 6% dividend per annum, find:
- which firm is paying better.
- if Mr. Gupta invests equally in both the firms and the difference between the returns from them is Rs. 30, find how much, in all, does he invest?
Rani has 500 shares of Rs 125 each of a company paying 12% dividend. Find her net income after paying 5% income tax.
Mahesh bought 600 shares of Rs 50 each of 'Excel Computers'. He sold one third of them when they were at a premium of Rs 20 and the remaining when they were at a discount of Rs 5. Find his gain or loss in the transaction.
Bhavana invested Rs 20,000 and Rs 25,000 in buying shares of 'Bharati Telecom' and 'Satyam Infoways' which later declared dividend of 10% and 12.5% respectively. After collecting the dividends Bhavana sells all her shares at a loss of 4% and 5% respectively on her investments. Find her total earnings.
Which among these is a better investment:
16% at 80 or 18% at 120
Mr Lal wants to give a monthly scholarship of Rs 225 to a poor student. How many 15%, Rs 100 shares of 'Mercantile Co-operative Bank' should he purchase to realize his aim? What will be his investment if the market price of the share is Rs 120?
Ananth had Rs 50 shares of 'Esco' paying 6% dividend. He sold them at a market price of Rs 80 and invested the proceeds in buying Rs 100 shares of 'Y2K Software' at Rs 150 and paying 11% dividend. He thus increased his annual income by Rs 2,150. How many shares of 'Esco' did he sell?
Krithika wants to invest Rs 10,000 in shares of different companies such that the percentage return on her investment is 8%. She invested Rs 4,500 in 6% Rs 100 shares at Rs 75, Rs 2,500 in 8% Rs 100 shares at par and the rest in 16% Rs 100 shares. Find the rate at which she bought the 16% shares.
Which in better investment: 7% Rs. 100 shares at Rs.120 or 8% Rs. 10 shares at Rs. 13.50.
