an important question from the book -ML aggarwal( avichal publication)class 10th , chapter3, shares and dividends ……..
we have given that A man sold some Rs. 100 shares paying 10% dividend at a discount of 25%
and invested the proceeds in Rs. 100 shares paying 16% dividend quoted at Rs. 80 a
nd thus increased his income by Rs. 2000.
please mention the procedure to Find the number of shares sold by him.
Q no. 33, exercise 3, ML Publication, share and dividends
Given,
Face value of each share = Rs. 100
Market value of each share = Rs. 100 – Rs.25
= Rs. 75
Rate of dividend = 10%
Let the no. of shares be taken as x
Selling price = x × 75 = Rs. 75x
Face value of x share = 100 x
Dividend annually = 100x × 10/100 = 10x
No. of shares purchased = 75x/80 = 15x/16
Face value of 15x/16 shares = 15x/16 × 100 = 1500x/16
Now, dividend = 1500x/16 × 16/100 = 15x
Thus, the increase in the income = 15x – 10x = 5x
Now, we have
5x = 2000
x = 2000/5 = 400
Hence, the number of shares purchased = 400