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Shares and Dividends | Shares and Dividends Exercise 3

Question 21

A company with 10000 shares of nominal value of Rs 100 declares an annual dividend of 8% to the share holders.

(i) Calculate the total amount of dividend paid by the company

(ii) Ramesh bought 90 shares of company at Rs 150 per share.

Calculate the dividend he received and the percentage return on his investment.

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(i) Given number of shares = 10000

Nominal value of each share = Rs 100

Rate of annual dividend = 8%

Total face value of 10000 shares = 100 × 10000

= Rs 1000000

Dividend = (1000000 × 8)/ 100

= Rs 80000

(ii) Number of shares = 90

Face value of each share = Rs 150

Total face value of 90 shares = 100 × 90

= Rs 9000

Therefore amount of dividend = (9000 × 8)/ 100

= Rs 720

Market value of 90 shares = 90 × 159

= Rs 13500

Therefore rate of interest = (720 × 100)/ (13500 × 1)

= 16/3 = 5.3 %

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Question 21

A company with 10000 shares of nominal value of Rs 100 declares an annual dividend of 8% to the share holders.

(i) Calculate the total amount of dividend paid by the company

(ii) Ramesh bought 90 shares of company at Rs 150 per share.

Calculate the dividend he received and the percentage return on his investment.

Looking to do well in your science exam ? Learn from an expert tutor. Book a free class!

(i) Given number of shares = 10000

Nominal value of each share = Rs 100

Rate of annual dividend = 8%

Total face value of 10000 shares = 100 × 10000

= Rs 1000000

Dividend = (1000000 × 8)/ 100

= Rs 80000

(ii) Number of shares = 90

Face value of each share = Rs 150

Total face value of 90 shares = 100 × 90

= Rs 9000

Therefore amount of dividend = (9000 × 8)/ 100

= Rs 720

Market value of 90 shares = 90 × 159

= Rs 13500

Therefore rate of interest = (720 × 100)/ (13500 × 1)

= 16/3 = 5.3 %

Our top 5% students will be awarded a special scholarship to Lido.

subject-cta
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