Question

By investing Rs.7,500 in a company paying 10 percent dividend, an annual income of Rs500 is received, on Rs 100 shares. Find the number of shares bought?

Answer 1

Hint: As, in the total investment is Rs 7500, as the dividend percentage is 10%, let x be the total number of shares, so the dividend percent of nominal value will be equal to dividend.

Complete step-by-step answer:
To start a business or to start a new project, an organization will require cash. Capital is called the amount of money needed. The capital required is split into small equal parts and the share is called each part.
The initial value of a share written on the share certificate is referred to as the face value or nominal value of the share (NV in short). Also known as register value, written value and par value is the NV of a share. The price at which a share is exchanged or acquired by stock exchanges on the financial market is referred to as its market value (in short, MV).
The portion of a company's taxable earnings paid to its owners is considered a dividend. The dividend is often based on a share's face value, independent of its MV.
Given, the total investment is Rs.7,500, dividend percent is 10 and nominal value of one share is Rs 100 and the annual income was Rs 500.
Let, the total number of shares bought be x.
Nominal value of x shares will be 100x.
As, the dividend is Rs 500.
And, we know the percentage of dividend from the number of shares will be equal to the dividend.
So,
 $ \
  10\% \,{\text{of}}\,{\text{100}}x = 500 \\
\dfrac{{10}}{{100}} \times 100x = 500 \\
\Rightarrow 10x = 500 \\
\Rightarrow x = \dfrac{{500}}{{10}} \\
\Rightarrow x = 50 \\
\ $
Therefore, the number of shares bought is 50.

Note: This question can be solved by another method,
The company is giving 10%, and man receives income of Rs 500 annually.
For, Rs 500 gets a dividend on shares value which will be equal to $ \dfrac{{500 \times 100}}{{10}} = {\text{Rs}}\,5000 $ .
So, the person buys, $ \dfrac{{5000}}{{100}} = 50 $ shares.