Question

Raksha had 50 preferred shares and 400 common shares of par value ₹ 100 each. If the dividend declared on preferred shares is 10% per annum and a semi-annual dividend of 7.5% is on common shares, find the annual dividend received by Raksha.

Answer 1

Given:

Preferred shares = 50, with 10% annual dividend

Common shares = 400, with 7.5% semi-annual dividend

Par value per share = ₹ 100

Annual dividend on preferred shares

= 50 × (10% of ₹ 100)

= 50 × ₹ 10

= ₹ 500

Semi-annual dividend = 7.5%, so annual = 7.5% × 2 = 15%

= 400 × (15% of ₹ 100)

= 400 × ₹ 15

= ₹ 6000

Total annual dividend:

= ₹ 500 + ₹ 6000

= ₹ 6500