an important question from the book -ML aggarwal( avichal publication)class 10th , chapter3, shares and dividends.

we have been given that A company with 10000 shares of Rs. 100 each, declares an annual dividend of 5%.

now we are to find (i) What is the total amount of dividend paid by the company ?

(ii) What would be the annual income of a man, who has 72 shares, in the company ?

(iii) If he received only 4% on his investment, find the price he paid for each share.

please solve all parts separately in extensive manner. as question is very important as can be asked in exams.

Q no. 32, exercise 3, ML Publication, share and dividends

Nominal value of 1 share = Rs. 100

Nominal value of 10,000

shares = 10,000 Ã— Rs. 100 = Rs. 10,00,000

(i) Dividend% = 5%

Dividend = 5% of Rs. 10,00,000

= (5/100) Ã— Rs.10,00,000 = Rs. 50,000

(ii) Nominal value of 72 shares = Rs. 100 Ã— 72 = Rs. 7,200

Dividend = 5% of Rs. 7,200 = (5/100) Ã— Rs.7,200 = Rs. 360

(iii) Let market value of 1 share = Rs y

Then market value of 10,000 shares = Rs. (10,000y)

Return% = 4%

4% of Rs. (10,000y) = Rs. 50,000 âŸ¹ (4/100) Ã—10,000 = Rs.50,000 âŸ¹ y = Rs. 125.

we have been given that :-

Nominal value of 1 share = Rs. 100

Nominal value of 10,000 shares = 10,000 Ã— Rs. 100 = Rs. 10,00,000

solution:-

(i) Dividend% = 5% Dividend

= 5% of Rs. 10,00,000

= (5/100) Ã— Rs.10,00,000

= Rs. 50,000

(ii) Nominal value of 72 shares = Rs. 100 Ã— 72

= Rs. 7,200 Dividend = 5% of Rs. 7,200

= (5/100) Ã— Rs.7,200 = Rs. 360

(iii) Let market value of 1 share = Rs y

Then market value of 10,000 shares = Rs. (10,000y)

Return% = 4%

4% of Rs. (10,000y) = Rs. 50,000

âŸ¹ (4/100) Ã—10,000

= Rs.50,000 âŸ¹ y = Rs. 125.