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
How much money will be required to buy 125, Rs. 30 shares at a discount of Rs. 3?
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?
Yash has 1200 shares of Rs 150 each of 'Honeywell Corporation' paying 18% dividend. Find his net income after paying.
Anu has 750 shares of Rs 60 each of 'Tata Infotech' paying 15% dividend. Find her net income after paying 6% income tax.
Divya invested Rs 50,000 in buying shares of Rs 125 each of 'Hitech Technologies'. She sold half of them when they were at a premium of 24% and the remaining half when they were at a discount of 20%. Find her gain or loss in the transaction.
Which among these is a better investment:
16% at 80 or 18% at 120
Which among these is a better investment:
15% at 80 or 12% at 75
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?
Gayathri wants to have a monthly income of Rs 500.For this she purchased Rs 75 shares of 'V.G.Electronics' paying 20% dividend. How many shares did Gayathri purchased and what is her investment if the market price of the share is Rs 62.50?
Which in better investment: 7% Rs. 100 shares at Rs.120 or 8% Rs. 10 shares at Rs. 13.50.
