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Share and Dividend Questions with Solutions
Example 1.
(i) Which is the better investment: 6% of Rs.150 shares at Rs.130 or 4% of Rs.10 shares at Rs. 15
(ii) Meena invested Rs. 9,846 in buying the shares of a company at Rs. 15 each. If the face value of each share be? 7 and the company paid an 11% dividend at the end of the year, Find the dividend earned by her.
Solution:
We have to solve in two cases
Case 1
Income on 130 = 6% of 150
= 6/100 × 150
= 9
Income on Rs 1 = 9/130 = 0.069
Case 2
Income on 15 = 4% of Rs 40
4/100 × 40 = 1.6
So, income on Rs 1 = 1.6/40 = 0.04
We have to find that investment in the second case is better than investment in the first case
(ii) Market value of 1 share = Rs 15
Total invested money to buy the shares of a company = 9846
Number of shares bought = 9846/15 = 656.4
Face value of 656.4 shares = 656.4 × 40 = 26.256
Dividend received by meera = 26.256 × 11/100 = 2.88
Example 2.
Santosh buys 40 shares of face value Rs 200 available at Rs 122.
(i) what is her investment?
(ii) If the dividend is 5.5%. What is the annual income?
(iii) If he wants to increase his annual income by Rs 120, how many extra shares should he buy?
Solution:
Given that
The face value = Rs 200
(i) Given that market value = Rs 122
And number of shares = 40
Therefore investment = number of shares × market value
= 40 × 122
= Rs 4480
(ii) We have income per share = 5.5% of face value
= (5.5/ 10 × 100) × 100
= Rs. 5.5
Therefore annual income = 5.5 × 40
= Rs 220
(iii) Therefore new annual income = 220 + 120 = Rs 340
Therefore number of shares = 340/5.5= 61.8
Therefore, number of extra share to be increased = 61.8 – 40
= 21.8
Example 3.
How much money will be required to buy 300 shares of Rs 14.50 shares at a premium of Rs 1?
Solution:
Number of shares to be bought = 300
Rs 14.50 shares at a premium of Rs 1 means
The nominal value of the share is 14.50
Its marked value = 14.50 + 1 = 15.50
Money required by 1 share = Rs 15.50
Money required to buy 300 shares = 300 × 15.50 = 4650
Example 4.
How much money will be required to buy 400 Rs 20 shares at a discount of Rs 2.50
Solution:
Number of shares to be bought = 200
Rs 20 shares at a discount of Rs 2.50 means
The nominal value of the share is Rs 20 and
Market value = Rs 20 – Rs 2.50 = Rs 17.5
Money required to buy 400 = 400 × 17.50 = 70000
Example 5.
A person buys 130 shares at a nominal value of Rs 20 each, which he sells at Rs 32.50 each. Find his profit and profit per cent.
Solution:
Nominal value of 130 shares = 20 × 130 = 2600
Market value of 130 shares = 32.50 × 130 = 4225
His profit = Rs 4225 – Rs 2600 = 1625
Profit = 1625/2600 × 100 = 62.5
Example 6.
A man invests Rs 700 in buying Rs 4 shares and when they are selling at a premium of Rs 2.15 he sells all the shares. Find his profit and profit percent
Solution:
Nominal value of 1 share = Rs 4
Market value of 1 share = Rs 4 + 2.15 = 6.15
Total money invested = Rs 700
Number of shares purchased = 700/4 = 175
Market value of 175 shares = 175 × 6.15 = 1076.25
His profit = 1076.25 – Rs 700 = 376.25
= 376.25/700 × 100 = 53.75
Example 7.
A man invests Rs 7700 in buying shares of a company of face value of rupees hundred each at a premium of 10% If he earns Rs 900 at the end of the year as the dividend.
(i) Find the number of shares in the company
(ii) The dividend percent per share
Solution:
Total investment = Rs 7700
Nominal value of 1 share = 100
Nominal value = face value
Marked value of 1 share = 10 % of 100 = 110
Number of shares per chased = 7700/110 = 700
Normal value of 70 shares = 7 × 100 = 7000
Let dividend percentage = Y %
Then Y % of Rs 7000 = Rs 900
= Y/100 × 7000 = 900
Y/100 = 900/7000
Y/100 = 900/7000
Y = 12
Example 8.
Mrs. Kiran invests Rs 1,24,030 in buying Rs 200 shares at a discount of 8 %, she sells shares worth Rs 62000 at a premium of 20 % and the rest at a discount of 4 %. Find her total gain or loss on the whole.
Solution:
Mrs. Kiran invests = 1,24,030
Nominal value of 1 share = Rs 200
Discount = 8% of Rs 200 = 8/100 × 200 = 16
Marked value of 1 share = Rs 200 – 16 = 184
Number of shares purchased = investment/Market value of 1 share = 124030/184 = 674.07
Number of shares worth by 62000 = 62000/200 = 310
Mrs. Kiran sells 310 shares at a premium of 20%
Marked value of 1 share = 200 + Rs 10 = Rs 210
Selling price of 310 shares = 674.07 – 310 = 364.07
She sells 364.07 shares at a discount of 4 %
Marked value of 1 share = 200 – 4 = 196
Selling price of 310 shares = 310 × 196 = 60,760
Total selling price = Rs(65100 + 60760) = 125,860
Total gain = total selling price – total investment = 125860 – 124030
= 1830
Example 9.
A man invests a certain sum on buying 22% Rs 240 shares at 15 % premium.
(i) Find his income from one share
(ii) The number of shares bought to have an income from the dividend Rs 5430
(iii) sum invested
Solution:
(i) Dividend on one share = 22% of Rs 240
= 22/100 × 240 = 52.8
So, the income from one share is = Rs 52.8
(ii) Number of shares bought by the man = annual income/dividend on one share
Annual income = 5430
= 5430/22 = 246.8
(iii) since the man bought shares of Rs 200 at 15 % Premium, the Market value of one share = Rs (1 + 15/100) × 200
Rs(115/100) × 200
= 230
His total investment = number of shares × Market value of one share
= 246.8 × 230
= 56,764
Example 10.
Aishwarya bought 328, Rs 80 shares at Rs 142 each find.
(i) Investment made by her.
(ii) income of Aishwarya from these shares, if the rate of dividend is 6.5 %
(iii) How much extra must Aishwarya invest in order to increase her income by 6200.
Solution:
(i) Nominal value of each share = Rs 80
Marked value of each share = 142
Investment made by her = 328 × 142 = 46,576
(ii) Dividend on 1 share = 6.5% of Rs 80 = 6.8
So, income of Aishwarya from these shares = 328 × 6.5 = 2132
(iii) If she wants to increase her income by 6200
The number of shares she should buy = increase in the income/income of one share = 6200/6.5 = 953.84
So, she should invest = 953.84/6.5 = 146.74
So, she should invest = 146.74 × 6.5 = 953.81