Sum
Calculate the percentage income in the following investment:
Rs 7,168 paying 15% when a Rs 80 share is available at 40% premium.
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Solution
Investment = Rs 7, 168
Nominal value of each share =Rs 80
Market value= Rs(80 + 40 % of Rs 80) =Rs (80+32) =Rs 112
No. of shares purchased = `7168/112 = 64`
Face value of 64 shares =Rs 80 x 64 =Rs 5, 120
Dividend = 15 %
Therefore, Annual Income = `(15 xx 5120)/100` = Rs 768
Hence, percentage income = `(768 xx 100)/7168` = 10.71%
Concept: Shares and Dividends
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