We will discuss here some of the problems on income and return from shares.
1. Matthew invested $ 67200 in $ 100 shares which are quoted at $ 120. Calculate the income if 12% dividend is declared on the shares.
Solution:
Total sum invested = $ 67200 and market value (M.V.) of each share = $ 120.
Therefore, number of shares bought = \(\frac{$ 67200}{$ 120}\) = 560
According to the problem, dividend on 1 share = 12% of face value/nominal value.
= 12% of $ 100
= $ 12
Therefore, the total income from the shares = 560 × $ 12 = $ 6720
2. Mr. Ryan bought 50 shares, each of nominal value $ 100. After one year he received $ 400 as dividend against them. Find the rate of dividend on his shares.
Solution:
The dividend on one share = \(\frac{$ 400}{50}\) = $ 8.
Therefore, the dividend was $ 8 on a share of face value or nominal value $ 100.
Therefore, the rate of dividend = \(\frac{$ 8}{$ 100}\) × 100 % = 8%
3. Calculate the dividend due at the end of a year on 250 shares of $ 50 each, if the halfyearly divided is 4 % of the value share.
Solution:
Given, halfyearly dividend on 1 share = 4% of $ 50
Therefore, the yearly dividend on 1 share = 8% of $ 50
= \(\frac{8}{100}\) × $ 50
= $ 4
Total dividend due at the end of the year = 250 × $ 4 = $ 1000
4. A company declares semiannual dividend of 6 %. Christian has 500 shares of face value/nominal value $ 25 each. Find Christian's annual income.
Solution:
Total nominal value of shares = $ 25 × 500 = $ 12500
Therefore, semiannual dividend = 6 % of $ 12500
= \(\frac{6}{100}\) × $ 12500
= $ 750.
Therefore, his annual income = $ 750 × 2 = $ 1500.
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