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Question
Vaishnavi bought 1000, Rs.100 shares from the stock market carrying an 8% dividend quoted at Rs.130. A few days later the market value of the shares went up by 10%. Vaishnavi sold all her shares. What was her total income from this transaction?
Solution
Given that,
Face value of the shares (F.V.) = ₹ 100
The market value of the shares (M.V.) = ₹ 130
Dividend = 8%
Income from each share = `8/100 xx 100` = ₹ 8
Number of shares bought by Vaishnavi = 1000
∴ Vaishnavi’s income from dividend
= 1000 × 8 = ₹ 8000
The price of the shares went up by 10%
The new market value of the shares.
= `130 + (130 xx 10/100)` = ₹ 143
Vaishnavi sold the shares at ₹ 143 which she bought at ₹ 130 each.
∴ Vaishnavi’s profit on one share = 143 - 130 = ₹ 13
∴ Vaishnavi’s profit after selling all her shares = 1000 × 13
= ₹ 13,000
Vaishnavi’s total income from this transaction = Income from dividend + income from the sale of shares
= 8,000 + 13,000
= ₹ 21,000
∴ Vaishnavi’s total income from this transaction was ₹ 21,000.
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