Prasoon invests ₹7500 in a company paying 6% dividend annually. ₹100 shares of this company are available at ₹150.
(a) Find the number of shares he purchased.
(b) Find his annual income.
(c) After one year, he sold 50% of his original shares at ₹175 each. Find his gain on the shares he sold.
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(a) Given,
Investment = ₹ 7,500, Market value of each share = ₹ 150
By formula,
Number of shares = $\frac{\text{Investment}}{\text{Market value of each share}}$
$= \frac{7500}{150}$
= 50.
Hence, the number of shares purchased = 50.
(b) Given,
Face value = ₹ 100, Dividend rate = 6%, Number of shares = 50
By formula,
Annual income = Number of shares × Rate of dividend × Face value
$= 50 \times \frac{6}{100} \times 100$
= ₹ 300.
Hence, his annual income = ₹ 300.
(c) Number of shares sold = 50% of 50 = $\frac{50}{100} \times 50$ = 25 shares.
Selling price of each share = ₹ 175
Cost price of each share = ₹ 150
Gain on each share = ₹ 175 − ₹ 150 = ₹ 25
Total gain = 25 × ₹ 25 = ₹ 625.
Hence, his gain on the shares he sold = ₹ 625.