#### Question

Mrs. Sharma buys 85 shares (par value Rs. 100) at Rs. 150 each.

(i) If the dividend is 6.5%, what will be her annual income?

(ii) If she wants to increase her income by Rs. 260; how much more should she invest?

#### Solution

Par value of 85 shares = Rs. 100 × 85 = Rs. 8,500

Market value of 85 shares = Rs. 150 × 85 = Rs. 12,750

(i) Dividend% = 6.5%

Dividend = 6.5% of Rs. 8,500

= `6.5/100` ×8,500 = 𝑅s. 552.50 𝐴ns

(ii) Required income = Rs. 552.50 + Rs. 260 = Rs. 812.50

If income is Rs. 552.50,then investment is

Rs. 12,750

If income is Rs. 812.50, then investment is = `(12,750)/(552.50) `× 812.50

= Rs. 18,750

More investment required = Rs. 18,750 – Rs. 12,750

= Rs. 6,000 Ans.

Is there an error in this question or solution?

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Mrs. Sharma Buys 85 Shares (Par Value Rs. 100) at Rs. 150 Each. (I) If the Dividend is 6.5%, What Will Be Her Annual Income? (Ii) If She Wants to Increase Her Income by Rs. 260; How Much More Should Concept: Shares and Dividends.

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