#### Question

A man invests Rs 20,020 in buying shares of nominal value Rs 26 at 10% premium. The dividend on the shares is 15% per annum. Calculate

1) the number of shares he buys

2) the dividend he receives annually.

3) the rate of interest he gets on his money.

#### Solution

Total investment = Rs 20,020

Nominal value of 1 share = Rs 26

Market value of 1 share = Rs 26+ 10% of Rs 26

= Rs 26+ Rs 2.60 = Rs 28.60

∴ No of shares purchased = `20.020/28.60` = 700 shares

Nominal value of 700 shares= Rs 26 x 700 = Rs 18,200

Dividend% = 15%

Dividend = 15% of Rs 18,200

= 15/100 xx 18200 = Rs 2730

`:. "Income"% = "Income"/"Investment" xx 100%`

`= 2730/20020 xx 100% = 150/11% = 13 7/11%`

Is there an error in this question or solution?

Solution A Man Invests Rs 20,020 in Buying Shares of Nominal Value Rs 26 at 10% Premium. the Dividend on the Shares is 15% per Annum. Calculate 1) the Number of Shares He Buys 2) the Dividend He Concept: Shares and Dividends.