A man invests ₹4500 in shares of a company

A man invests ₹4500 in shares of a company which is paying 7.5% dividend. If ₹100 shares are available at a discount of 10%. Find:

1. Number of shares he purchases.
2. His annual income.

Answer

i. Market value of each share = ₹100 - 10% of ₹100 = ₹90

∴ Number of shares = 4500 / 90 = 50

ii. Annual Income = (7.5×100×50) / 100 = ₹375