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Question
A man buys Rs. 50 shares of a company, paying 12% dividend, at a premium of Rs. 10. Find:
- the market value of 320 shares;
- his annual income;
- his profit percent.
Solution
Nominal value of 1 share = Rs. 50
Market value of 1 share = Rs. 50 + Rs. 10 = Rs. 60
Market value of 320 shares = 320 × 60 = Rs. 19,200
Nominal value of 320 shares = 320 × 50 = Rs. 16,000
Annual income = 12% of Rs. 16,000
= `12/100 xx 16000`
= Rs. 1,920
Profit% = `1920/19200 xx 100%`
= 10%
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