Stocks and Shares

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  1. A medicine company issued 125000 shares of par value $ 20 each. If the total dividend declared by the company is $ 375000, find out the rate of dividend paid by the company.








  1. View Hint View Answer Discuss in Forum

    ∵ Rate of dividend paid by the company =Total dividendx 100%
    Total par value

    Correct Option: A

    Given that :- Number of shares = 125000
    Par value of a share = $ 20
    ∴ Total par value of 125000 shares = Number of shares x Par value of a share
    Total par value of 125000 shares = $ (1250000 × 20) = $ 2500000
    Total dividend = $ 375000

    ∴ Rate of dividend paid by the company = Total dividendx 100%
    Total par value

    Rate of dividend paid by the company = 375000x 100% = 15 %
    2500000

  1. Find the income on 71/2% stock of $ 20000 purchased at $ 120.








  1. View Hint View Answer Discuss in Forum

    Required Income on $ 20000 = Income on $ 1 stock x Face value of the stock

    Correct Option: C

    Here , Face value of the stock = $ 20000

    Income on $ 100 stock = $ 7
    1
    		 = $
    15
    22

    Income on $ 1 stock = $15 / 2= $ 15
    100200

    Required Income on $ 20000 = Income on $ 1 stock x Face value of the stock
    Income on $ 20000 stock = $15x 20000 = $ 1500
    200


  1. The capital of a company is made up of 50000 preferred shares with dividend of 20% and 20000 common shares, the par value of each type of share being $ 10. The company had a total profit of $ 180000 out of which $ 30000 were kept in reserve fund and the remaining distributed to shareholders. Find out the dividend percent to the common shareholders.








  1. View Hint View Answer Discuss in Forum

    Hence, dividend percent paid on a common share

    =
    dividend paid on a common share
    		x 100%
    Face value of one share

    Correct Option: C

    Given :- Face value of each share = $ 10
    Number of preferred shares = 50000
    Total number of preferred shares = Number of preferred shares x Face value of each share
    = 50000 x 10 = 500000
    Number of common shares = 20000
    The total profit of the company = $ 180000.
    Amount kept in reserve fund = $ 30000
    ∴ Net amount paid as dividend to shareholders = The total profit of the company - reserve fund
    = $ (180000 - 30000) = $ 150000
    Dividend paid by the company on 50000 preferred shares
    = 20% of Total number of preferred shares

    = $500000 x
    20
    		= $ 100000
    100

    ∴ Dividend to be paid to common shareholders = Net amount paid as dividend to shareholders - Dividend paid by the company on 50000 preferred shares
    = $ (150000 - 100000) = $ 50000.
    Thus, dividend paid on a common share
    = $
    Dividend to be paid to common shareholders
    Number of common shares

    = $
    50000
    		= $ 2.50
    20000

    Hence, dividend percent paid on a common share
    =
    dividend paid on a common share
    		x 100%
    Face value of one share

    = $
    2.50
    		x 100% = 25%
    10

  1. A company issued 50000 shares of par value $ 100 each. If the total dividend declared by the company is $ 125000, out of which `50000 have been kept in reserve fund and the remaining is distributed as dividend, find out the rate of dividend paid by the company.








  1. View Hint View Answer Discuss in Forum

    Rate of dividend paid by the company = Net amount paid as dividend x 100%
    Total shares

    Correct Option: B

    Here , Face value = $ 100
    Total dividend declared = $ 125000
    Amount kept in reserve fund = $ 50000
    Net amount paid as dividend to the shareholders = $ (125000 - 50000) = $ 75000
    Number of shares of par value $ 100 each = 50000
    ∴ Total par value of 50000 shares = Number of shares x Face value
    Total par value of 50000 shares = $ (50000 × 100) = $ 5000000

    Rate of dividend paid by the company = Net amount paid as dividend x 100%
    Total shares

    Rate of dividend paid by the company = 75000x 100 % = 3% = 11% .
    500000022


  1. A company issued 50000 shares of par value $ 10 each. If the total dividend declared by the company is $ 62500, then find out the rate of dividend paid by the company.








  1. View Hint View Answer Discuss in Forum

    ∵ Rate of dividend paid by the company =Total dividendx 100%
    Total par value

    Correct Option: B

    Given:- Number of shares = 50000
    Par value of a share = $ 10
    ∴ Total par value of 50000 shares = Number of shares x Par value of a share
    Total par value of 50000 shares = $ 50000 x 10 = $ 500000
    Total dividend = $ 62500

    ∴ Rate of dividend paid by the company =Total dividendx 100%
    Total par value

    Rate of dividend paid by the company = 62500x 100% = 12 1%
    5000002