Question

Find the annual income derived from 250, Rs 60 shares paying \[5\% \] dividend.

Answer 1

Hint: Here we need to find the value of the annual income. We have been given the nominal value of shares, the number of shares, and rate of dividend. We will use the formula of annual income which is equal to the product of the number of shares, nominal value, and the rate of dividend. We will substitute all the given values in this formula to get the required value of the annual income.

Formula used:
Annual income \[ = \] number of share \[ \times \] nominal value \[ \times \] rate of dividend

Complete step-by-step answer:
It is given that:
Number of shares \[ = 250\]
Nominal value of the shares \[ = {\rm{Rs}}60\]
Rate of dividend \[ = 5\% \]
We know the formula of annual income which is equal to the product of number of shares, nominal value and the rate of dividend.
Now, we will write the formula of annual income mathematically.
Annual income \[ = \] number of share \[ \times \] nominal value \[ \times \] rate of dividend
Now, we will substitute 250 for the number of shares, 60 for the nominal value of shares, and \[5\% \] for the rate of dividend in the above formula. Therefore, we get
\[ \Rightarrow \] Annual income \[ = 250 \times 60 \times \dfrac{5}{{100}}\]
Multiplying the terms, we get
\[ \Rightarrow \] Annual income \[ = {\rm{Rs}}750\]
Therefore, the value of annual income is equal to Rs 750.

Note: To solve this question, we need to know the meaning of basic terms like nominal value, rate of dividend etc. The nominal value is also known as the par value of a company's stock and it is the value which is assigned for balance sheet purposes and it is equal to the ratio of share capital of a company to the total number of issued shares. The nominal value of a share is also known as the arbitrary value allotted to that unit. A dividend is defined as the payment made by a corporation to its shareholders, generally as a distribution of profits.