# Calculation of Income, Return and Number of Shares

We will discuss here about the calculation of income, return and number of shares.

Computation of income and return

If the number of shares held by a shareholder = n, rate of dividend = r% per annum and face value = F then

Annual income = $$\frac{nrF}{100}$$

Annual return = $$\frac{annual income}{investment in shares}$$ ×  100%

Calculation of number of shares

To find the number of shares held by a person, we sue the following.

Number of share held = $$\frac{investment}{investment for the share (i.e., FV or MV as the case may be)}$$

Or, $$\frac{ annual income}{ income from one share}$$

Or, $$\frac{ total face value}{ face value of one share}$$.

Solved example on computation of income, return and number of shares:

1. Michael buys $100 shares at$ 20 premium in a company paying 15% divided. Find the MV of 200 shares, his annual income and his percentage income.

Solution:

Market value of one share = $100 +$ 20 = $120 Therefore, the market value of 200 shares = 200 ×$ 120 = $24,000 Annual income = Number of shares × Rate of dividend × nominal value or face value of 1 share = $$\frac{200 × 15}{100 × 100}$$ =$ 3000

$3000 is the income obtained on investing$ 24000

Therefore, the percentage income = $$\frac{3000}{24000}$$ × 100 % = 12.5 %

2. A man invests in shares for which we have the condition “7% of $100 shares at$ 120”. What is the annual income of a person holding 150 such shares? Also, find his annual profit percentage.

Solution:

“7% of $100 shares at$ 120” means that

The annual income from 1 share of NV $100 is$ 7, invest for 1 share being $120. Therefore, the annual income from 150 shares = $$\frac{nrF}{100}$$ = $$\frac{150 × 7 × 100}{100}$$ =$ 7 × 150 = $1050. His investment for 150 shares = 150 ×$ 120 = $18000 Therefore, the required profit percentage (return) = $$\frac{ 1050}{ 18000}$$ × 100% = 5$$\frac{5}{6}$$% 3. Alexander bought some shares of$ 10 at par value which yields 10% divided per annum. At the end of one year he received $2000 as dividend. How many shares did he buy? Solution: Let the number of shares be n. Then Annual income or dividend = $$\frac{nrF}{100}$$ ⟹$ 2000 = $$\frac{n × 10 ×  10}{100}$$

⟹ n = $$\frac{2000 × 100}{10 × 10}$$ = 2000

Therefore, the required number of shares = 2000

Shares and Dividends

Didn't find what you were looking for? Or want to know more information about Math Only Math. Use this Google Search to find what you need.

## Recent Articles

1. ### Roman Numerals | System of Numbers | Symbol of Roman Numerals |Numbers

Feb 22, 24 04:21 PM

How to read and write roman numerals? Hundreds of year ago, the Romans had a system of numbers which had only seven symbols. Each symbol had a different value and there was no symbol for 0. The symbol…

2. ### Worksheet on Roman Numerals |Roman Numerals|Symbols for Roman Numerals

Feb 22, 24 04:15 PM

Practice the worksheet on roman numerals or numbers. This sheet will encourage the students to practice about the symbols for roman numerals and their values. Write the number for the following: (a) V…

3. ### Roman Symbols | What are Roman Numbers? | Roman Numeration System

Feb 22, 24 02:30 PM

Do we know from where Roman symbols came? In Rome, people wanted to use their own symbols to express various numbers. These symbols, used by Romans, are known as Roman symbols, Romans used only seven…

4. ### Place Value | Place, Place Value and Face Value | Grouping the Digits

Feb 19, 24 11:57 PM

The place value of a digit in a number is the value it holds to be at the place in the number. We know about the place value and face value of a digit and we will learn about it in details. We know th…