Question

A company with 4000 shares of nominal value of Rs 110 each declares an annual dividend of 15%. Calculate the total amount of dividend paid by the company. What is the annual income of Shah Rukh who holds 88 shares in the company?

Answer 1

Hint – In this question use the concept that the total amount of dividend paid by the company is the product of the number of shares, nominal value of the share and the rate of dividend in percentage so use this concept to reach the solution of the question.

Complete step-by-step answer:
Given data:
Total number of shares, T = 4000
Nominal (N) value of the share = Rs. 110
Rate (r) of dividend paid by the company on one share = 15 %.
Now we have to calculate the total amount of dividend paid by the company.
Now as we know that the total amount of dividend paid by the company is the product of the number of shares, nominal value of the share and the rate of dividend in percentage.
Let the total amount of dividend paid by the company be X Rs.
Therefore,
$ \Rightarrow X = T \times N \times \dfrac{r}{{100}}$
Now substitute all the values in the above equation we have,
$ \Rightarrow X = 4000 \times 110 \times \dfrac{{15}}{{100}}$
Now simplify this equation we have,
$ \Rightarrow X = 40 \times 110 \times 15 = 66000$ Rs.
Now it is given that Shah Rukh holds 88 shares in the company.
So the nominal value of the 88 shares is the multiplication of the 88 shares and the nominal value of each share.
So the nominal value of the 88 shares = $88 \times 110$
Now the annual income of the Shah Rukh is the multiplication of the nominal value of the 88 shares and the annual dividend.
So the annual income of the Shah Rukh is = $88 \times 110 \times \dfrac{{15}}{{100}}$
Now simplify this we have,
So the annual income of Shah Rukh is = $1452$ Rs.
So this is the required answer.

Note – Whenever we face such types of questions the key concept we have to remember is that the anything in percentage is written as percentage number divided by 100 (i.e. for n% = $\dfrac{n}{{100}}$), so first calculate the nominal values of 88 shares Shah Rukh holds in the company as above then multiply this resultant value by the given dividend percentage and simplify we will get the required answer.