Stocks and Shares
- Find out the annual dividend received by Sunil for his 200 preferred shares and 1000 common shares, both of par value $ 100 each if the dividend declared on a preferred share is 10% per annum and an annual dividend of 121/2% on the common shares.
-
View Hint View Answer Discuss in Forum
Required Total dividend received by Sunil = Total preferred shares + Total common shares
Correct Option: A
Given :- Face value = $ 100
common shares = 1000 , preferred shares = 200
Dividend on 200 preferred shares = 10% x $ ( preferred shares x Face value )
Dividend on 200 preferred shares = 10% of $ (200 × 100)Dividend on 200 preferred shares = $ 
10 x 20000 
= $ 2000 . 100
Annual dividend of 121/2% is declared on common shares.Dividend on common shares = 12 1 % of $ (1000 x 100) 2 Dividend on common shares = $ 25 / 2 x 100000 100 Dividend on common shares = $ 25 x 1000 = $ 12500 . 2
∴ Total dividend received by Sunil = Total preferred shares + Total common shares
= $ (2000 + 12500 ) = $ 14500.
- Find the income derived form 44 shares of Rs. 25 each at 5 premium (brokerage 1/4 per share ), the rate of dividend being 5%. Also find the rate of interest in the investment ?
-
View Hint View Answer Discuss in Forum
Cost of shares = 44(25 + 5 + 1/4) = Rs. 1331
∴ Investment made = Rs. 1331
Now, face value of 1 share = Rs. 25
∴ Face value of 44 shares = Rs. (44 x 25) = Rs. 1100
Now, dividend on Rs. 100 = Rs. 11/2
∴ Dividend on Rs. 1100 = Rs. [(11/2) / 100] x 1100 = Rs. 60.50Correct Option: A
Cost of shares = 44(25 + 5 + 1/4) = Rs. 1331
∴ Investment made = Rs. 1331
Now, face value of 1 share = Rs. 25
∴ Face value of 44 shares = Rs. (44 x 25) = Rs. 1100
Now, dividend on Rs. 100 = Rs. 11/2
∴ Dividend on Rs. 1100 = Rs. [(11/2) / 100] x 1100 = Rs. 60.50
Also, income on investment of Rs. 1331 = Rs. 60.50
∴ Income on investment of Rs. 100 = Rs. (60.50 / 1331) x 100 = 4.55%
- The shares of a company of par value $ 10 each, are available at 20% premium. Find out the amount paid by the buyer who wants to buy 2500 shares. What would be the gain of the buyer if he sells those shares at the rate of $ 20 per share?
-
View Hint View Answer Discuss in Forum
∵ Gain from selling 2500 shares = Number of share x Gain of the shareholder on selling one share
Correct Option: C
Given :- Par value of a share = $ 10
Number of shares = 2500
Selling price per share = $ 20
The shares of a company at 20% premium.
∴ Market value of a share = 120% of Par value of a share= $ 10 x 120 = $ 12 100
The amount to be paid by the buyer to purchase 2500 shares = Number of share x Market value of a share
= $ (2500 × 12) = $ 30000.
Gain of the shareholder on selling one share = Selling price per share - Market value of a share
= $ (20 - 12) = $ 8.
∴ Gain from selling 2500 shares = Number of share x Gain of the shareholder on selling one share
= $ (2500 × 8) = $ 20000.
- What investment will be required to purchase $ 90000 of 8% stock at 110?
-
View Hint View Answer Discuss in Forum
∵ Market value of $ 90000 stock = Market value of $ 1 stock x purchase stock
Correct Option: B
Here , purchase stock = $ 90000
Market value of $ 100 stock = $ 110.
Market value of $ 1 stock
= $ 110 100
∴ Market value of $ 90000 stock = Market value of $ 1 stock x purchase stock= $ 110 x 90000 = $ 99000 100
∴ An investment of $ 99000 is required to purchase $ 90000 of 8% stock at 110.
- Find the income by investing $ 81000 in 9% stock at 135.
-
View Hint View Answer Discuss in Forum
∵ Income on $ 81000 = $ Income on $ 135 x market value of the stock investment
Correct Option: C
Here, the market value of the stock = $ 81000.
By investing $ 135, stock of par value $ 100 is available
∴ Income on $ 135 is $ 9.∴ Income on $ 81000 = $ Income on $ 135 x market value of the stock investment = $ 9 x 81000 = $ 5400 135
