#### Question

Mr. Parekh invested Rs. 52,000 on Rs. 100 shares at a discount of Rs. 20 paying 8% dividend. At the end of one year, he sells the shares at a premium of Rs. 20. find

1) The annual dividend

2) The profit earned including his dividend.

#### Solution

Amount invested = Rs. 52,000

Face value of share = Rs. 100

Discount = Rs. 20

Market price = Rs. 100 – Rs. 20 = Rs. 80

Number of shares = Rs. 52,000/ Rs. 80 = 650

Dividend % = 8%

(1) Annual dividend = 650 × 8 = Rs. 5200

(2) Amount at which the shares were sold = Rs. 120 × 650 = Rs. 78,000

Profit earned including his dividend = Rs. (78,000 – 52,000) + Rs. 5,200 = Rs. 31,200

Is there an error in this question or solution?

Solution Mr. Parekh Invested Rs. 52,000 on Rs. 100 Shares at a Discount of Rs. 20 Paying 8% Dividend. at the End of One Year He Sells the Shares at a Premium of Rs. 20. Find 1) The Annual Dividend 2) The Profit Earned Including His Dividend. Concept: Shares and Dividends.