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Question
A man invests a certain sum in buying 15% Rs. 100 shares at 20% premium. Find:
- his income from one share.
- the number of shares bought to have an income, from the dividend, Rs. 6480.
- sum invested.
Solution
i. The dividend on one share = 15% of Rs. 100
= Rs. `(15/100 xx 100)`
= Rs. 15
So, the income from one share is Rs. 15.
ii. Number of shares bought by the man
= `"Annual income"/"Dividend on one share"`
= `6480/15`
= Rs. 432
iii. Since the man bought shares of Rs. 100 at 20% premium, the market value of one share
= Rs. `(1 + 20/100) xx 100`
= Rs. `(120/100 xx 100)`
= Rs. 120
∴ His total investment = Number of shares × Market value of one share
= 432 × 120
= Rs. 51,840
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