#### Question

A man buys 400, twenty-rupee shares at a discount of 20% and receives a return of 12% on his money. Calculate:

(1) the amount invested by him.

(2) the rate of dividend paid by the company.

#### Solution

Nominal value of 1 share = Rs 20

Market value of 1 share = Rs 20 – 20% of Rs 20

= Rs 20 – Rs 4 = Rs 16

No. of shares purchased = 400

Nominal value of 400 shares = 400 x 20 = Rs 8,000

(i) Market value of 400 shares = 400 x 16 = Rs 6,400

(ii) Return%= 12%

Income = 12% of Rs 6,400

`= 12/100 xx "Rs" 6400 = "Rs" 768`

Dividend%= `"Income"/"Nominal value" xx 100%`

`= 768/8000 xx 100% = 9.6%`

Is there an error in this question or solution?

Solution A Man Buys 400, Twenty-rupee Shares at a Discount of 20% and Receives a Return of 12% on His Money. Calculate: (1) the Amount Invested by Him. (2) the Rate of Dividend Paid by the Company. Concept: Shares and Dividends.