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Question
Tarun invested Rs 24,000 and Rs 30,000 in buying Rs 100 at par shares of 'Vam Organics' and 'Hero Honda' which later declared dividend of 12% and 15% respectively. After collecting the dividends Tarun sold the shares as their prices had fallen by Rs 5 and Rs 10 respectively. Find Tarun's earnings from the above transactions.
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Solution
Total investment = Rs (24,000+30,000) = Rs 54,000
No. of shares of 'Vam Organics' = `"money invested"/"Cost of one share" = 24000 /100 = 240`
No. of shares of 'Hero Honda' = `"money invested"/"Cost of one share" = 30000/100 = 300`
Dividend given by 'Vam Organics' = 12 % = Rs `(12 xx 24000)/100` = Rs 2880
Dividend given by 'Hero Honda' = 15 % = Rs `(15 xx 30000)/100` = Rs 4500
Total dividend earned = Rs (2,880+4,500) =Rs 7,380
Money earned by selling shares of 'Varn Organics' = Rs (95 x 240)
= Rs 22,800
Money earned by selling shares of 'Hero Honda' = Rs (90 x 300)
= Rs 27,000
Total money earned by selling shares = Rs (22,800+27,000) = Rs 49,800
Total earnings = money earned by selling shares +dividends earned
=Rs (49,800+7,380) = Rs 57,180
Tarun's earnings from the transactions= Rs (57, 180-54,000)
= Rs 3,180
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