Question

Vaishnavi bought 1000, Rs.100 shares from the stock market carrying an 8% dividend quoted at Rs.130. A few days later the market value of the shares went up by 10%. Vaishnavi sold all her shares. What was her total income from this transaction?

Answer 1

Given that,

Face value of the shares (F.V.) = ₹ 100

The market value of the shares (M.V.) = ₹ 130

Dividend = 8%

Income from each share = `8/100 xx 100` = ₹ 8

Number of shares bought by Vaishnavi = 1000

∴ Vaishnavi’s income from dividend

= 1000 × 8 = ₹ 8000

The price of the shares went up by 10%

The new market value of the shares.

= `130 + (130 xx 10/100)` = ₹ 143

Vaishnavi sold the shares at ₹ 143 which she bought at ₹ 130 each.

∴ Vaishnavi’s profit on one share = 143 - 130 = ₹ 13

∴ Vaishnavi’s profit after selling all her shares = 1000 × 13

= ₹ 13,000

Vaishnavi’s total income from this transaction = Income from dividend + income from the sale of shares

=  8,000 + 13,000

= ₹ 21,000

∴ Vaishnavi’s total income from this transaction was ₹ 21,000.