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A lady holds 1800, Rs. 100 shares of a company that pays 15% dividend annually. Calculate her annual dividend. If she had bought these shares at 40% premium, what percentage return does she get on her investment? Give your answer to the nearest integer.

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

A lady holds 1800, Rs. 100 shares of a company that pays 15% dividend annually.
what would be the orderly procedure to find her annual dividend.
If she had bought these shares at 40% premium,
then please describe the way to find percentage return  she gets on her investment.
please mention the formula if  anywhere being applied.

Q no. 6, exercise 5, ML Publication, share and dividends

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1 Answer

  1. Nominal value of 1 share = Rs. 100
    Market value of 1 share = Rs. 100 + 40% of Rs. 100
    = Rs. 100 + Rs. 40
    = Rs. 140 No. of shares purchased = 1800
    Nominal value of 1800 shares = 1800 × 100
    = Rs. 1,80,000
    Market value of 1800 shares = 1800 × 140
    = Rs. 2,52,000
    (i) Dividend%= 15%
    Dividend = 15% of Rs. 1,80,000
    = (15/100) × Rs.1,80,000=.27,000
    (ii) return%=(income/investment)*100
    =(27000/252000)*100=10.7%=11% approximately

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