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Question
How much money will be required to buy 400, Rs 12.50 shares at a premium of Rs 1?
Solution
Number of shares to be bought = 400
Rs 12.50 shares at a Premium of Rs 1 means;
the nominal value of the share is Rs 12.50 and its market value = Rs 12.50 + Rs 1 = Rs 13.50
∴ Money required to buy 1 share = Rs 13.50
=> Money required to buy 400 shares = 400 xx Rs 13.50 = Rs 5400
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