Arun invested Rs. 9000 in 6% Rs. 100 shares at Rs. 90 per share. After a year, he sold shares at Rs. 85 each and invested the proceeds [including his dividend] in 18% Rs. 20 shares at Rs. 50. Find

: i). his dividend for the first year

ii). His annual income in the second year

iii). The percentage increase in his returns on his original investment.

Asked by venkatesh.keshavamurthy | 7th Jul, 2019, 08:58: PM

Expert Answer:

Investment = Rs. 9000

FV = Rs. 100

MV = Rs. 90

Number of shares = 9000/90 = 100 shares

Divident on 1 share = 6% of 100 = Rs. 6

Total annual dividend(first year) = 6 × 100 = Rs. 600

Sale price of 100 shares = Rs. 8500

Total investment = 8500+600 = Rs. 9100

FV of new share = Rs.20

MV of new share = Rs.50

Number of shares = 9100/50 = 182 shares

Divident on 1 share = 18% of 20= Rs. 3.6

Total divdend(annual income) = 3.6 × 182 = Rs. 655.2

% increase = (655.2-600)/600 × 100 = 9.2%


Answered by Arun | 10th Jul, 2019, 04:58: PM