Question

A sum of rupees 11,880 is invested in Rs. 50 shares available at 12% discount. Find the income, if a dividend of 12% is given on the shares

Answer 1

Total investment = Rs. 11,880
Nominal value of 1 share = Rs. 50
Market value of 1 share = Rs. 50 − 12% of Rs. 50
= Rs. 50 – Rs. 6 = Rs. 44
∴ No of shares purchased =` (11,880)/44` = 270 shares

Nominal value of 270 shares = Rs. 50 × 270 = Rs. 13,500
Dividend% = 12%
Dividend = 12% of Rs. 13,500

=` 12/ 100`×13,500 = 𝑅s. 1,620