#### 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?

Solution 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.