Problem Statement
A man invests ₹$9,600$ on ₹$100$ shares at ₹$80$. If the company pays him $18\%$ dividend, find:
(i) The number of shares he buys.
(ii) His annual dividend income.
(iii) The percentage return on his investment.
Verified Solution & Marking Scheme
Number of Shares
$$\text{Number of shares} = \frac{\text{Total Investment}}{\text{Market Value of 1 share}} = \frac{9600}{80} = 120 \text{ shares}$$
Annual Dividend Income
$$\text{Face Value (FV) of 120 shares} = 120 \times 100 = ext{Rs } 12,000$$
$$\text{Annual Income} = 18\% \text{ of } 12000 = \frac{18}{100} \times 12000 = ext{Rs } 2,160$$
Percentage Return on Investment
$$\text{Return \%} = \frac{\text{Annual Income}}{\text{Total Investment}} \times 100 = \frac{2160}{9600} \times 100 = \frac{216}{96} \times 10 = 22.5\%$$