A man invests Rs. 8000 in a company paying 8% dividend when a share of face value of Rs. 100 is selling at Rs. 60 premium,
(i) What is his annual income,
(ii) What percent does he get on his money?
Solution:
Investment = Rs. 8000
Face value of each share = Rs. 100
Market value = Rs. 100 + Rs. 60
= Rs. 160
Rate of dividend = 8% p.a.
A man buys 400 ten-rupee shares at a premium of Rs. 2.50 on each share. If the rate of dividend is 8%, Find,
(i) his investment
(ii) dividend received
(iii) yield.
Solution:
No. of shares = 400
Face value of each share = Rs. 10
Market value of each share
= Rs. 10 + Rs. 2.50
= Rs. 12.50
Rate of dividend = 8%
