Question

Shruti invested Rs. 6064 in share of FV Rs. 10 when MV is Rs 60. She sold all the shares at MV Of Rs 50 after taking \[60\% \] dividend. She paid \[0.4\% \] brokerage at each stage of transitions. What was the total gain or loss in this transition?

Answer 1

Hint: Here we need to find the total gain or loss in this transition. First, we will find the number of shares she holds. Then we will calculate the actual investment amount and then using this, we will calculate the brokerage charge. From the given dividend rate we will calculate the total dividend earned. At last we will calculate the total loss using all these data.

Complete step-by-step answer:
It is given that:
Investment amount \[ = {\rm{Rs}}\,6024\]
Future value of the share \[ = {\rm{Rs}}\,10\]
Market value (MV) \[ = {\rm{Rs}}\,60\]
Now, we will calculate the number of shares she holds, which is equal to the ratio of the investment amount to the market value.
Therefore,
Number of shares \[ = \dfrac{{6024}}{{60}}\]
On further simplification, we get
\[ \Rightarrow \] Number of shares \[ = 100.4 \approx 100\]
We know that the actual investment amount is equal to the product of market value and number of shares. Therefore,
Actual investment amount \[ = 60 \times 100 = Rs\,6000\]
As we know that she paid \[0.4\% \] brokerage at each stage of transitions
Now, we will calculate the beverage charge.
Beverage charge \[ = 6000 \times 0.4\% \]
On further simplification, we get
\[ \Rightarrow \] Beverage charge \[ = 6000 \times \dfrac{{0.4}}{{100}} = {\rm{Rs}}\,24\]
The total investment value including brokerage is equal to the sum of the beverage charge and the actual investment amount.
Total investment value including brokerage \[6000 + 24 = {\rm{Rs}}6024\]
As she sold her share at a MV of \[{\rm{Rs}}\,50\].
Therefore,
The sell value \[ = 100 \times 50 = {\rm{Rs}}\,5000\]
Now, we will again calculate the brokerage charge which will be equal to the sell value and the percent paid on brokerage.
Brokerage charge \[ = 5000 \times 0.4\% \]
On further simplification, we get
\[ \Rightarrow \] Beverage charge \[ = 5000 \times \dfrac{{0.4}}{{100}} = {\rm{Rs}}\,20\]
So, the total return after paying brokerage will be equal to the difference between the beverage charge and the sell value.
Total return after paying brokerage \[ = 5000 - 20 = {\rm{Rs}}\,4980\]
Now, we will calculate the total face value of the shares and this will be equal to the product of number of shares and the face value of the shares.
Total face value of the shares \[ = 100 \times 10 = {\rm{Rs}}\,1000\]
As the rate of dividend \[ = 60\% \]
Therefore, total dividend earned will be equal to the product of total face value and the rate of dividend.
Total dividend earned \[ = 60\% \times 1000\]
On further simplification, we get
\[ \Rightarrow \] Total dividend earned \[ = \dfrac{{60}}{{100}} \times 1000 = {\rm{Rs}}\,600\]
Total return will be equal to the sum of the total return after paying beverage and the total dividend sum.
Total return \[ = 4980 + 600 = {\rm{Rs}}\,5580\]
Thus, the total loss occurs equal to the difference of the total investment and the total return.
Total loss \[ = 6024 - 5580 = {\rm{Rs}}\,444\]
Hence, the total loss is equal to Rs 444.

Note: Here, we need to note that if the market value is greater than the face value, then the share is at a premium. If the market value is less than the face value, then the share is at discount. If the market value is equal to the face value, then the share is at par. The dividend is defined as the profit received by the shareholder of a company. The shareholders only get a part of the profit and not the entire profit.