# Problems on Income and Return from Shares

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 $50 each, if the half-yearly divided is 4 % of the value share. Solution: Given, half-yearly dividend on 1 share = 4% of$ 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 = $1000 4. A company declares semi-annual dividend of 6 %. Christian has 500 shares of face value/nominal value$ 25 each. Find Christian's annual income.

Solution:

Total nominal value of shares = $25 × 500 =$ 12500

Therefore, semi-annual dividend = 6 % of $12500 = $$\frac{6}{100}$$ ×$ 12500

= $750. Therefore, his annual income =$ 750 × 2 = \$ 1500.

Shares and Dividends