Practice the questions given in the worksheet on share and dividend.
1. Michael has a choice to invest in 10-dollar shares of two firms at $ 13 or at $ 16. If the first firm pays 5% dividend and the second firm pays 6% dividend per annum, find:
(i) which firm is paying better.
(ii) if Michael invests equally in both the firms and the difference between the return from them is $ 30. Find how much, in all, does he invest.
2. A dividend of 9% was declared on $ 100 shares selling at a certain price in the stock market. If the rate of return is 7.5%, calculate
(i) the market price of each share, and
(ii) the amount to be invested to obtain an annual dividend of $ 630.
3. William has the option of investing his money in 8% $ 10 shares at a premium of $ 3.50 or 7% $ 100 shares at a premium of 20%. Which of the two investments will be more profitable for him?
4. Daniel invests $ 1344 in buying shares of face value $ 24 selling at 12% premium. The dividend on the shares is 15% per annum. Calculate
(i) the number of shares Daniel buys, and
(ii) the dividend he receives annually.
5. Matthew invests $ 5625 in a company paying 7% per annum when share of $ 10 stands for $ 12.50. Find peter’s income from this investment.
If he sells 60 % of these shares for $ 10 each, find his gain or loss in this transaction.
6. George buys $ 100 shares of a company which pays 15 % dividend. He buys the shares at a price from the market that gives him 10% return on his investment. At what price did he buy each share?
7. Ryan invests in 9% $ 100 shares at $ 145 but Brandon invests in 7% $ 100 shares at $ 116. Whose investment is better?
Answers for the worksheet on share and dividend are given below:
1. (i) First firm
(ii) $ 62,400
2. (i) $ 120
(ii) $ 8400
3. First kind
4. (i) 50
(ii) $ 180
5. $ 315; $ 675 less
6. $ 150