#### Question

A man invests Rs 7,770 in a company paying 5% dividend when a share of nominal value of Rs 100 sells at a premium of Rs 5. Find:

1) the number of shares bought;

2) annual income;

3) percentage income.

#### Solution

Total money invested = Rs 7,770

Nominal value of 1 share = Rs 100

Market value of 1 share = Rs 100 + Rs 5 = Rs 105

∴ No. of shares purchased = `7770/105 = 74`

Nominal value of 74 shares = `74 xx 100 = Rs 7400`

Annual income = 5% of Rs 7400

`= 5/100 xx 74000`

= Rs 370

Income% = `370/7770 xx 100% = 4.76%`

Is there an error in this question or solution?

Solution A Man Invests Rs 7,770 in a Company Paying 5% Dividend When a Share of Nominal Value of Rs 100 Sells at a Premium of Rs 5. Find: 1) The Number of Shares Bought; 2) Annual Income; 3) Percentage Income. Concept: Shares and Dividends.