Chapter 3 - Shares and Dividends Exercise Ex. 3(A)

Question 1

How much money will be required to buy 400, Rs. 12.50 shares at a premium of Rs. 1?

Solution 1

Question 2

How much money will be required to buy 250, Rs.15 shares at a discount of Rs.1.50?

Solution 2

Question 3

A person buys 120 shares at a nominal value of Rs 40 each, which he sells at Rs 42.50 each. Find his profit and profit percent.

Solution 3

Nominal value of 120 shares = Rs 40  120= Rs 4,800

Market value of 120 shares= Rs 42.50  120= Rs 5,100

His profit = Rs 5,100 - Rs 4,800= Rs 300.

Question 4

Find the cost of 85 shares of Rs 60 each when quoted at Rs 63.25.

Solution 4

Market value of 1 share= Rs 63.25

Market value of 85 shares= Rs 63.25  85= Rs 5,376.25.

Question 5

A man invests Rs 800 in buying Rs 5 shares and when they are selling at a premium of Rs 1.15, he sells all the shares. Find his profit and profit percent.

Solution 5

Nominal value of 1 share = Rs 5

Market value 1 share = Rs 5 + Rs 1.15 = Rs 6.15

Total money invested = Rs 800

Market value of 160 shares= 160 x 6.15= Rs 984

His profit = Rs 984 - Rs 800= Rs 184 Ans.

 

Question 6

Find the annual income derived from 125, Rs.120 shares paying 5% dividend.

Solution 6

Question 7

A man invests Rs 3,072 in a company paying 5% per annum, when its Rs 10 share can be bought for Rs 16 each. Find :

(i)his annual income

(ii)his percentage income on his investment.

Solution 7

Market value of 1 share= Rs 16

Nominal value of 1 share= Rs 10

Money invested= Rs 3,072

Nominal value of 192 shares= 10 x 192= Rs 1,920

 

Question 8

A man invests Rs 7,770 in a company paying 5% dividend when a share of nominal value of Rs 100 sells at a premium of Rs 5. Find:

(i)the number of shares bought;

(ii)annual income;

(iii)percentage income.

Solution 8

Total money invested= Rs 7,770

Nominal value of 1 share= Rs 100

Market value of 1 share= Rs 100 + Rs 5= Rs 105

Nominal value of 74 shares= 74 x 100= Rs 7,400

 

Question 9

A man buys Rs 50 shares of a company, paying 12% dividend, at a premium of Rs 10. Find:

(i)the market value of 320 shares;

(ii)his annual income;

(iii)his profit percent.

Solution 9

Nominal value of 1 share= Rs 50

Market value of 1 share= Rs 50 + Rs 10= Rs 60

Market value of 320 shares= 320 x 60 = Rs 19,200

Nominal value of 320 shares= 320 x 50= Rs 16,000

Question 10

A man buys Rs 75 shares at a discount of Rs 15 of a company paying 20% dividend. Find:

(i)the market value of 120 shares;

(ii)his annual income;

(iii)his profit percent

Solution 10

Nominal value of 1 share= Rs 75

Market value of 1 share= Rs 75 - Rs 15= Rs 60

Market value of 120 shares= 120 x 60= Rs 7,200 

Nominal value of 120 shares= 120 x 75= Rs 9,000

Question 11

A man has 300, Rs 50 shares of a company paying 20% dividend. Find his net income after paying 3% income tax.

Solution 11

Nominal value of 1 share= Rs 50

Nominal value of 300 shares= 300 x 50 = Rs 15,000

His net income= Rs 3,000 - Rs 90= Rs 2,910

Question 12

A company pays a dividend of 15% on its ten-rupee shares from which it deducts income tax at the rate of 22%. Find the annual income of a man who owns one thousand shares of this company.

Solution 12

Nominal value of 1 share= Rs 10

Nominal value of 1000 shares= 1000 x 10 = Rs 10,000

His net income= Rs 1,500 - Rs 330= Rs 1,170.

 

Question 13

A man invests Rs 8,800 in buying shares of a company of face value of rupees hundred each at a premium of 10%. If he earns Rs 1,200 at the end of the year as dividend, find:

(i)the number of shares he has in the company.

(ii)the dividend percent per share.

Solution 13

Total investment= Rs 8,800

Nominal value of 1 share= Rs 100

Market value of 1 share= Rs 110

 

Nominal value of 80 shares= 80 x 100= Rs 8,000

Let dividend%= y%

 

Question 14

A man invests Rs 1,680 in buying shares of nominal value Rs 24 and selling at 12% premium. The dividend on the shares is 15% per annum. Calculate:

(i)the number of shares he buys;

(ii)the dividend he receives annually.

Solution 14

Nominal value of 1 share= Rs 24

Market value of 1 share= Rs 24+ 12% of Rs 24

= Rs 24+ Rs 2.88= Rs 26.88

Total investment= Rs 1,680

 

Nominal value of 62.5 shares= 62.5 x 24= Rs 1,500

Question 15

By investing Rs 7,500 in a company paying 10 percent dividend, an annual income of Rs 500 is received. What price is paid for each of Rs 100 share ?

Solution 15

Total investment= Rs 7,500

Nominal value of 1 share= Rs 100

No. of shares purchased= y

Nominal value of y shares= 100 x y= Rs(100y)

Dividend%= 10%

Dividend = Rs 500