Question

A man invests Rs. 9,600 on Rs. 100 share at Rs. 80. If the company pays him 18% dividend find:
$\left( i \right)$ The number of shares he buys
$\left( {ii} \right)$ His total dividend
$\left( {iii} \right)$ His percentage returns on the shares

Answer 1

Hint: In this particular type of question use the concept that the number of shares he buys is the ratio of the total investment by a man on shares to the Purchased value of one share by a man and that the total amount of dividend paid by the company is the product of the number of shares, nominal value of one share and the rate of dividend in percentage so use these concept to reach the solution of the question.

Complete step by step solution:
Given data:
A man invests Rs. 9,600 on shares.
Nominal (N) value of one share = Rs. 100
Purchased value of one share by a man = Rs. 80
Rate (r) of dividend paid by the company on one share = 18 %.
$\left( i \right)$ The number of shares he buys
So the number of shares he buys is the ratio of the total investment by a man on shares to the Purchased value of one share by a man.
So the number of shares he buys = $\dfrac{{9600}}{{80}} = 120$
$\left( {ii} \right)$ His total dividend
Now as we know that the total amount of dividend paid by the company is the product of the number of shares (T), nominal value (N) of one share and the rate (r) 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 = 120 \times 100 \times \dfrac{{18}}{{100}}$
Now simplify this equation we have,
$ \Rightarrow X = 120 \times 18 = 2160$ Rs.
$\left( {iii} \right)$ His percentage returns on the shares
Now the percentage return on the shares is the ratio of total dividend paid by the company to the total investment and multiplied by 100.
So the percentage returns on the shares = $\dfrac{{2160}}{{9600}} \times 100 = 22.5$%.
So these are the required answers.

Note: Whenever we face such types of questions the key concept we have to remember is that always recall the basic formulas of what we have to calculate such as the percentage return on the shares is the ratio of total dividend paid by the company to the total investment and multiplied by 100, so just substitute the given values in the formulas as above and simplify we will get the required answer.