Ms. Kaur invested ₹ 8,000 in buying ₹100 shares of a company paying 6% dividend at ₹ 80. After a year, she sold these shares at ₹75 each and invested the proceeds including the dividend received during the first year in buying ₹ 20 shares, paying 15% dividend at ₹ 27 each. Find the :
(a) dividend received by her during the first year.
(b) number of shares she purchased using the total proceeds including the dividend.
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Given,
For initial investment,
Investment = ₹ 8,000
Face Value = ₹ 100
Market Value = ₹ 80
Dividend Rate = 6%
By formula,
Number of shares = $\frac{\text{Investment}}{\text{Market value of each share}}$
= $\frac{8000}{80}$
= 100
By formula,
Dividend for the first year = No. of shares × Rate of div. × N.V. of 1 share
= 100 × $\frac{6}{100}$ × 100
= ₹ 600
Hence, dividend for first year = ₹ 600.
(b) Given,
Number of shares sold = 100
Selling price per share = ₹ 75
Proceeds from sale = Number of shares × selling price
= 100 × 75
= ₹ 7,500
Total proceeds = Proceeds from sale + Dividend received = 7500 + 600 = ₹ 8,100
Total investment = ₹ 8,100
Market value per share = ₹ 27
Number of new shares = $\frac{\text{Investment}}{\text{Market value of each share}}$
= $\frac{8100}{27}$
= 300.
Hence, number of shares purchased by Ms. Kaur = 300.