Question

Calculate the percentage income in the following investment:

Rs 12,375 in a Rs 75 share paying 4% and available at a discount of Rs 20.

Answer 1

Investment= Rs 12,375 

Nominal value of each share = Rs 7 5 

Market value = Rs (7 5 - Rs 20) = Rs 55 

No. of shares purchased = `12375/55 = 225`

Face value of 225 shares = Rs 75 x 225 = Rs 16,87 5 

Dividend = 4 % 

Therefore, Annual Income = `(4 xx 16875)/100` = Rs 675

Hence, percentage income = `(675 xx 100)/12375 = 5.45 %`