Worksheet Solutions: Shares and Dividend

A. Very Short Answer Questions (1 mark each)

Q1. The nominal value of a share is ₹50. The company declares a dividend of 8%. Find the dividend on one share.

Solution:
Dividend on 1 share = (8/100) × 50 = ₹4

Q2. A ₹100 share is quoted at a discount of ₹20. Find its market value.

Solution:
M.V. = N.V. - Discount = 100 - 20 = ₹80

Q3. A man buys 40 shares of N.V. ₹10 each at par. How much has he invested?

Solution:
Investment = No. of shares × M.V. = 40 × 10 = ₹400

Q4. A person receives a dividend of ₹120 from 60 shares. Find the dividend per share.

Solution:
Dividend per share = Total dividend ÷ No. of shares = 120 ÷ 60 = ₹2

Q5. If the market value of a ₹50 share is ₹75, find the premium.

Solution:
Premium = M.V. - N.V. = 75 - 50 = ₹25

B. Short Answer Questions (3-4 marks each)

Q6. A person invests ₹6,000 in ₹25 shares quoted at ₹30. If the company declares 8% dividend, find his annual income.

Solution:
Step 1: No. of shares = Investment ÷ M.V. = 6000 ÷ 30 = 200
Step 2: Dividend per share = (8/100) × 25 = ₹2
Step 3: Total income = 200 × 2 = ₹400
Answer: Annual income = ₹400

Q7. The market value of a ₹100 share is ₹80. If a man invests ₹4,000 in these shares and the company pays 10% dividend, find his annual income and percentage return.

Solution:
Step 1: No. of shares = 4000 ÷ 80 = 50
Step 2: Dividend per share = (10/100) × 100 = ₹10
Step 3: Total income = 50 × 10 = ₹500
Step 4: Percentage return = (Income ÷ Investment) × 100 = (500 ÷ 4000) × 100 = 12.5%
Answer: Income = ₹500, Percentage return = 12.5%

Q8. A person bought 250 shares of nominal value ₹20 at a premium of ₹5. If the dividend declared is 12%, find his annual income.

Solution:
Step 1: M.V. of 1 share = 20 + 5 = ₹25
Step 2: Dividend per share = (12/100) × 20 = ₹2.40
Step 3: Total income = 250 × 2.40 = ₹600
Answer: Annual income = ₹600

Q9. How much should be invested in ₹50 shares quoted at ₹40 to earn an annual income of ₹400, if the dividend declared is 10%?

Solution:
Step 1: Dividend per share = (10/100) × 50 = ₹5
Step 2: No. of shares needed = Income ÷ Dividend per share = 400 ÷ 5 = 80
Step 3: Investment = No. of shares × M.V. = 80 × 40 = ₹3,200
Answer: Required investment = ₹3,200

Q10. Which is a better investment: 12% ₹100 shares at ₹110 or 10% ₹100 shares at ₹90?

Solution:
Case 1: Percentage return × M.V. = Dividend% × N.V.
→ Return% × 110 = 12 × 100 → Return% = 10.9%

Case 2: Return% × 90 = 10 × 100 → Return% = 11.1%

Answer: Second option (10% ₹100 shares at 90) is better.

C. Long Answer Questions (5-6 marks each)

Q11. A man invests ₹12,000 in ₹50 shares at a market value of ₹60. The company pays 15% dividend. Find:
(i) The number of shares he buys
(ii) His total annual income
(iii) His percentage return

Solution:
Step 1: No. of shares = 12,000 ÷ 60 = 200
Step 2: Dividend per share = (15/100) × 50 = ₹7.50
Step 3: Annual income = 200 × 7.50 = ₹1,500
Step 4: Percentage return = (Income ÷ Investment) × 100 = (1500 ÷ 12000) × 100 = 12.5%
Answer: (i) 200 shares, (ii) Income = ₹1,500, (iii) Return = 12.5%

Q12. A man buys 100 shares of N.V. ₹25 each at a discount of 20%. If the company pays 18% dividend, find his annual income and percentage return.

Solution:
Step 1: M.V. of 1 share = 25 - 20% of 25 = 25 - 5 = ₹20
Step 2: Investment = 100 × 20 = ₹2,000
Step 3: Dividend per share = (18/100) × 25 = ₹4.50
Step 4: Total income = 100 × 4.50 = ₹450
Step 5: Percentage return = (450 ÷ 2000) × 100 = 22.5%
Answer: Annual income = ₹450, Return = 22.5%

Q13. A company declares a dividend of 12%. A man buys 400 shares of N.V. ₹100 at such a price that his return is 10% on his investment. Find the market value of each share.

Solution:
Step 1: Dividend on 1 share = (12/100) × 100 = ₹12
Step 2: Let M.V. of 1 share = ₹x
Step 3: Return% × M.V. = Dividend% × N.V.
→ 10 × x = 12 × 100 → 10x = 1200 → x = ₹120
Answer: Market value of each share = ₹120