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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?
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- $ 25000
- $ 30000
- $ 20000
- $ 22000
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.
