#### Question

Mr.Tiwari. invested Rs 29,040 in 15% Rs 100 shares quoted at a premium of 20%. Calculate:

(1) the number of shares bought by Mr Tiwari.

(2) Mr. Tiwari’s income from the investment.

(3) the percentage return on his investment.

#### Solution

Total investment = Rs 29,040

Nominal value of 1 share = Rs 100

Market value of 1 share = Rs 100+ 20% of Rs 100

= Rs 100 + Rs 20 = Rs 120

∴ No of shares purchsed = `29040/120 = 242` shares

Nominal value of 242 shares = Rs 100 x 242 = Rs 24,200

Dividend% = 15%

Dividend = 15% of Rs 24,200

`=15/100 xx 24200 = Rs 24200`

`= 15/100 xx 24200 = Rs 24200`

`"income%" = "income"/"investment" xx 10`

`= 3630/29040 xx 100%`

= 12.5%

Is there an error in this question or solution?

Solution Mr.Tiwari. Invested Rs 29,040 in 15% Rs 100 Shares Quoted at a Premium of 20%. Calculate: (1) the Number of Shares Bought by Mr Tiwari. (2) Mr. Tiwari’S Income from the Investment. (3) the Percentage Return on His Investment. Concept: Shares and Dividends.