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Revision Notes: Shares and Dividend | Mathematics Class 10 ICSE PDF Download

Important Concepts

  • A share is one of a finite number of portions in the capital of a company.
  • The person who subscribes in shares is called a share holder.
  • Dividend is the profit which the company distributes to the share holders at the end of the financial year.
  • Nominal Value (N.V) or face value (F.V) is the original value of the share.
  • Market Value (M.V) is the price at which the share is quoted in the market.
  • If the market value of a share is the same as its nominal value, the share is said to be at par.
  • A share is said to be above par or at premium, if its market value is more than its face value.
  • A share is said to be below par or at a discount, if its market value is less than its face value.
  • The profit, which a share-holder gets from his investment in the company is called dividend.
  • The dividend is always calculated on the face value and not on the market value.
  • The dividend is expressed as a percentage of the nominal value of the share.
  • The shares are generally of two types:
    i. Preferred shares
    ii. Common or ordinary shares

Important Formulae’s

  • Investment = Number of shares x Market Value of 1 share
  • Number of shares bought = Sum invested /M.V of 1 share
  • Number of shares bought = Total dividend/Dividend on 1 share
  • Number of shares bought = Total Income/Income on 1 share
  • Income = Number of shares × rate of dividend × F.V
  • F.V. = Face - value = Nominal - value = N.V.
  • Return % = Income ÷ Investment × 100
The document Revision Notes: Shares and Dividend | Mathematics Class 10 ICSE is a part of the Class 10 Course Mathematics Class 10 ICSE.
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FAQs on Revision Notes: Shares and Dividend - Mathematics Class 10 ICSE

1. What are shares and how do they work?
Ans. Shares represent ownership in a company and are issued to raise capital. When you buy shares, you become a shareholder, entitled to a portion of the company's profits, typically distributed as dividends. The value of shares can fluctuate based on market conditions, company performance, and investor sentiment.
2. What is a dividend and how is it calculated?
Ans. A dividend is a payment made by a corporation to its shareholders, usually as a distribution of profits. It can be calculated as a fixed amount per share or as a percentage of the share's price, known as the dividend yield. Companies typically announce dividends on a quarterly or annual basis.
3. What types of shares exist and what are their characteristics?
Ans. The main types of shares are common shares and preferred shares. Common shares usually provide voting rights and dividends that can vary. Preferred shares typically offer fixed dividends and priority over common shares in asset distribution during liquidation but usually do not carry voting rights.
4. How do I invest in shares and what should I consider?
Ans. To invest in shares, you need to open a brokerage account and research potential companies to invest in. Consider factors like the company's financial health, market position, dividend history, and your investment goals. It's also important to diversify your portfolio to manage risk.
5. What are the tax implications of receiving dividends?
Ans. Dividends can be subject to taxation, depending on your country's tax laws. In many jurisdictions, dividends are taxed at a different rate than regular income, and some may qualify for preferential tax rates. It's essential to consult a tax professional to understand your specific obligations and benefits related to dividend income.
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