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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
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 × Rs. 13.50 = Rs. 5400
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