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Question
A man invests Rs. 8,800 in buying shares of a company of face value of rupees hundred each at a premium of 10%. If he earns Rs. 1,200 at the end of year as dividend, find:
- the number of shares he has in the company.
- the dividend percent per share.
Solution
Investment = Rs. 8,800
Face value of each share = Rs. 100
And market value of each share
= Rs. 100 + Rs. 10
= Rs. 110
Total income = Rs. 1200
Total face value
= `"Rs."(8800 xx 100)/(110)`
= Rs. 8000
i. No. of shares
= `(8000)/(100)`
= 80
ii. Rate of dividend
= `(1200 xx 100)/(8000)`
= 15%
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