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Question
Salman buys 50 shares of face value Rs. 100 available at Rs. 132.
- What is his investment?
- If the dividend is 7.5%, what will be his annual income?
- If he wants to increase his annual income by Rs. 150, how many extra shares should he buy?
Solution
Number of shares = 50
Market value (M.V.) of each share = Rs. 132
1. Salman's investment = M.V. of each share × Number of shares
= Rs. (132 × 50)
= Rs. 6,600
2. Dividend on one share = 7.5% of Rs. 100 = Rs. 7.50
His annual income = 50 × Rs. 7.50 = Rs. 375
3. Salman wants to increase his income by Rs. 150
Income on one share = Rs. 7.50
Number of extra shares to be bought = `"Increase in annual income"/"Income in one share"`
= `150/7.50`
= 20
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