Question

Salman buys 50 shares of face value Rs. 100 available at Rs. 132.

1. What is his investment?
2. If the dividend is 7.5%, what will be his annual income?
3. If he wants to increase his annual income by Rs. 150, how many extra shares should he buy?

Answer 1

Number of shares = 50

Market value (M.V.) of each share = Rs. 132

1. Salman's investment = M.V. of each share × Number of shares

= Rs. (132 × 50)

= Rs. 6,600

2. Dividend on one share = 7.5% of Rs. 100 = Rs. 7.50

His annual income = 50 × Rs. 7.50 = Rs. 375

3. Salman wants to increase his income by Rs. 150

Income on one share = Rs. 7.50

Number of extra shares to be bought = `"Increase in annual income"/"Income in one share"`

= `150/7.50`

= 20