Question

Mohan invested ₹ 29,040 in 15% of ₹ 100 shares of a company quoted at a premium of 20%. Calculate

1. the number of shares bought by Mohan
2. his annual income from shares
3. the percentage return on his investment

Answer 1

Investment = ₹ 29,040

Rate of dividend = 15%

Number of shares = 100

Premium = 20%

i. Number of shares = `"Investment"/("Market value of a share")`

= `29040/(100 + 20)`

= `29040/120`

= 242

ii. Annual income from shares = (Number of shares) × (Face value of a share) × (Rate of dividend)

= 242 × 100 × 15100

= ₹ 3630

iii. The percentage return on his investment = `"Income"/"Investment" xx 100`

= `3630/29040 xx 100`

= `100/8`

= 12.5%

= `12 1/2%`