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Question
A company with 4000 shares of nominal value of Rs.110 declares annual dividend of 15%. Calculate :
(i) the total amount of dividend paid by the company,
(ii) the annual income of Shah Rukh who holds 88 shares in the company,
(iii) if he received only 10% on his investment, find the price Shah Rukh paid for each share.
Solution
Number of shares = 4000
Nominal (face) value of each share = Rs.110
Total face value of 4000 shares
= Rs.110 x 4000
= Rs, 440000
Rate of annual dividend = 15%
(i) Annual of dividend
= `(440000 xx 15)/(100)`
= Rs.66000
(ii) Number of shares, Shah Rukh has = 88
∴ Face value of 88 shares
= 88 x 110
= Rs.9680
and annual dividend
= `"Rs."(9680 xx 15)/(100)`
= Rs.1452
(iii) Rate of annual incomes on his investment = 10%
∴ His investment
= `(1452 xx 100)/(10)`
= Rs.14520
and market value of each share
= `(14520)/(88)`
= Rs.165.
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