#### Question

A man buys 400, twenty-rupee shares at a premium of Rs 4 each and receives a dividend of 12%. Find:

1) the amount invested by him.

2) his total income from the shares.

3) percentage return on his money.

#### Solution

Nominal value of 1 share = Rs 20

Market value of 1 share = Rs 20 + Rs 4 = Rs 24

No. of shares purchased = 400

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

1) Market value of 400 shares = 400 × 24 = Rs 9,600

2) Dividend% = 12%

Dividend = 12% of Rs 8000

`= 12/100 xx Rs 8000 = Rs 960`

3) Percentage return = `"income"/"investment" xx 100%`

`= 960/9600 xx 100% = 10%`

Is there an error in this question or solution?

Solution A Man Buys 400, Twenty-rupee Shares at a Premium of ₹ 4 Each and Receives a Dividend of 12%. Find: 1) The Amount Invested by Him. 2) His Total Income from the Shares. 3) Percentage Return on His Money. Concept: Shares and Dividends.