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?

Answer 1

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.