[1 Mark Question Answer]

Question 11 Mark

At what price should a 6.25% Rs. 50 share be quoted when the money is worth 10%?

Answer

$\begin{aligned} & \text { Interest on Rs. } 100 \\ & \text { worth }=\text { Rs. } 10 \\ & \text { If the interest is Rs. } 10 \text {, then market value = Rs. } 100 \\ & \text { and if interest is Rs. } 6.25 \text {, then market } \\ & \text { value }=\frac{50 \times 6.25}{10} \\ & =\frac{50 \times 625}{10 \times 100} \\ & =\text { Rs. } 31.25 \text {. }\end{aligned}$

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Question 21 Mark

At what price should a 6.25% Rs. 100 shares be quoted when the money is worth 5%?

Answer

$
\begin{aligned}
& \text { Interest on Rs. } 100 \text { worth = Rs. } 5 \\
& \text { If interest is Rs. } 5 \text {, then market value = Rs. } 100 \\
& \text { and if interest is Rs. } 6.25 \text {, then market value } \\
& =\frac{100}{5} \times 6.25 \\
& =\frac{100 \times 625}{5 \times 100} \\
& =125
\end{aligned}
$
Market value of each share = Rs. 125 .

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Question 31 Mark

A company declared a dividend of 14%. Find tire market value of Rs. 50 shares if the return on the investment was 10%.

Answer

Rate of dividend $=14 \%$
Dividend on Rs. $50=\frac{14 \times 50}{100}=$ Rs 7
Now Rs. 10 is interest on the investment of
$
\text { = Rs. } 100
$
Rs. 7 will be the interest on
$
=\frac{100 \times 7}{10}=\text { Rs. } 70
$
Hence Market value of Rs. 50 shares = Rs. 70 .

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Question 41 Mark

Rs. 100 shares of a company are sold at a discount of Rs. 20. If the return on the investment is 15%. Find the rate of dividend declared

Answer

$\begin{aligned} & \text { Market value of each shares }=100-20 \\ & =\text { Rs. } 80 \\ & \text { Interest on investment of Rs. } 80 \\ & =15 \% \times 80 \\ & =\frac{15}{100} \times 80 \\ & =\text { Rs } 12 \\ & \text { Dividend on face value of Rs. } 100=\text { Rs. } 12 \\ & \text { Rate of dividend }=12 \% .\end{aligned}$

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Question 51 Mark

A company declares 8 percent dividend to the share holders. If a man receives Rs. 2840 as his dividend, find the nominal value of his shares.

Answer

$\begin{aligned} & \text { Rate of dividend }=8 \% \\ & \text { Amount of dividend }=\text { Rs. } 2840 \\ & \therefore \text { Nominal value of shares } \\ & =\frac{2840 \times 100}{8} \\ & =\text { Rs. } 35500 .\end{aligned}$

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Question 61 Mark

A man buys shares at the par value of Rs 10 yielding 8% dividend at the end of a year. Find the number of shares bought if he receives a dividend of Rs 300.

Answer

Face value of each share $=$ Rs. 10
Rate of dividend $=8 \%$ p.a.
Total dividend $=$ Rs. 300
$\therefore$ Total face value of shares
$=\frac{300 \times 100}{8}$
$=\text { ₹ } 3750$
and no. of shares
$=\text { ₹ } \frac{3750}{10}$
$=\text { ₹ } 375$.

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Question 71 Mark

Find the dividend received on 60 shares of Rs, 20 each if 9% dividend is declared.

Answer

$\begin{aligned} & \text { Value of one share }=\text { Rs. } 20 \\ & \text { Value of } 60 \text { shares }=\text { Rs. } 20 \times 60 \\ & =\text { Rs. } 1200 \\ & \text { Rate of dividend }=9 \% \\ & \text { Total dividend }=\text { Rs. } 1200 \times 9 \% \\ & =\text { Rs. } 1200 \times \frac{9}{100} \\ & =\text { Rs. } 108 . .\end{aligned}$

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Question 81 Mark

At what price should a 9% Rs 100 share be quoted when the money is worth 6%?

Answer

If interest is 6 then investment $=$ Rs. 100
and if interest is 9 , then investment
$
\begin{aligned}
& =\text { Rs. } \frac{100 \times 9}{6} \\
& =\text { Rs. } 150
\end{aligned}
$
Market value of each share
$=$ Rs. 150

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Question 91 Mark

Find the percentage interest on capital invested in 18% shares when a Rs 10 share costs Rs 12.

Answer

Dividend on one share $=18 \%$ of Rs 10
$
\begin{aligned}
& =\frac{18 \times 10}{100} \\
& =\text { Rs. } \frac{9}{5}
\end{aligned}
$
Income on ₹ $12=\frac{9}{5}$
Then income of ₹ $100=\frac{9}{5} \times \frac{100}{12}=15$
$\therefore$ Percentage interest on capital $=15 \%$.

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Question 101 Mark

If a man received ₹ 1080 as dividend from 9% ₹ 20 shares, find the number of shares purchased by him.

Answer

$\begin{aligned} & \text { Income on one share }=\frac{9}{100} \times 20 \\ & =\text { Rs. } \frac{9}{5} \\ & \therefore \text { No. of shares }=1080 \times \frac{5}{9} \\ & =120 \times 5 \\ & =600 .\end{aligned}$

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