#### Question

How much should a man invest in Rs 100 shares selling at Rs 110 to obtain an annual income Rs 1,680, if the dividend declared is 12%?

#### Solution

Nominal value of 1 share = Rs 100

Market value of 1 share = Rs 110

Let no. of shares purchased = n

Then nominal value of n shares = Rs (100n)

Dividend% = 12%

Dividend = Rs 1,680

∴ 12% of 100n = Rs 1680

`=> 12/100 xx 100n = Rs 1680`

`=>n = (1680 xx 100)/(12 xx 100) = 140`

Then market value of 140 shares= 140 × 110 = Rs 15,400

Is there an error in this question or solution?

Solution How Much Should a Man Invest in Rs 100 Shares Selling at Rs 110 to Obtain an Annual Income Rs 1,680, If the Dividend Declared is 12%? Concept: Shares and Dividends.