Dividends are also called stock dividend it is dividend payment to shareholders that is made in shares. Shares and dividends are closely related. In the previous articles, we have learned about shares and dividends. After learning the concept we suggest you solve the problems on shares and dividends. You can see different types of questions based on the shares and dividends. Go through the below Numerical Problems on Shares and Dividends and practice for the exams.

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Shares and Dividends Problems with Solutions

Example 1.
Govind has some Rs 200 shares of company A paying 10% dividend. He sells a certain number of these shares at a discount of 20 % and invests the proceeds in Rs 200 shares at Rs 80 of company B paying a 20 % dividend. If his income from the shares sold, increases by Rs 17000, find the number of shares sold by Govind.
Solution:
Let the number of shares the man sold be x.
The nominal value of shares = 200
Rate of dividend = 10%
Dividend on each share = 10% of Rs 200 = 20
So, the dividend on x shares = Rs 20 × x = Rs 20x
Selling price of each share = Rs 200 – 20 % of Rs 200 = Rs 200 – 40 = 160.
Amount obtained on selling x shares = Rs 160 × x = 160 x.
The proceeds he invests is Rs 200 shares at Rs 80 of company B paying 20% dividend.
The nominal value of share = Rs 200
Marked value of each share = 80
Number of shares bought by the man = amount invested/Marked value of each share
= 160x/80 = 2x
Dividend on each share = 20% of Rs 200 = 50
Total dividend received = dividend on each share × number of shares
= 40 × 2 x
= 80x
Increase in the income = 17000
80x – 20x = 17000
60x = 17000
x = 17000/60 = 283.3
Hence the number sold by Govind = 283.3

Example 2.
A man invests a certain sum of money is 4 % hundred rupees shares at Rs 14 Premium when the shares sells to Rs 82 he sold out all the shares bought and invested to proceed in 8 % eight rupee shares at Rs 6. If the change in his income is Rs 420. Find the sum invest originally.
Solution:
Let the original sum invested = x
Then number of Rs 100 shares purchased at premium of Rs 14.
x/100 + 14 = x/114
The income per original share at 4 % = Rs 4
Total income = number of shares × earning per share
= Number of shares × 4
= x/114 × 4 = 0.03
Proceeds from sale of original share at Rs 82 per share = number of shares × 82
= x/114 × 82 = 0.07x
Number of Rs 8 shares purchased at Rs 6 per share from proceeds of original shares = proceeds from sale of original share/6 = income per new share Rs 8 at 8%
8/100 × 8 = 0.64
Total income from new shares = number of shares × income per share
0.07x × 0.64 = 0.04x
Given Chan he in income = 420
420 = 0.04x – 0.04x = 0.01x
420/0.01 = x
Thus the original Sum invested x = 42000

Example 3.
Mike invested Rs 24,200 in 11% Rs 26 shares of a company, If he receives a dividend of Rs 2104 find the number of shares he bought and marked value of each share.
Solution:
Total dividend = 2104
Dividend on each share = 11% of Rs 26 = 11/100 × 26 = 2.86
Number of shares bought = Total dividend/dividend on 1 share
= 2104/2.86 = 735.6
Marked value of 735.6 shares = 24,200
Marked value of each share = total investment/number of shares = 24200/735.6 = 32.89

Example 4.
A man invests Rs 1280 in buying shares of nominal value Rs 28 and selling at 14 % premium. Calculate the number of shares that he buys and the dividend he receives annually.
Solution:
Nominal value of 1 share = Rs 28
Marked value of 1 share = 28 + 14 % of Rs 28
28 + 14/100 × 28 = 31.92
Total investment = 1280
Number of shares purchased = 1280/31.92
= 40.10
Nominal value of 40.10 shares = 40.10 × 28 = 1122.8
Dividend = 18% of 1122.8
= 18/100 × 1122.8
= 202.10

Example 5.
By investing Rs 6500 in a company paying 20 percent dividend an annual income of Rs 600 is received what price is paid for each of Rs 120 shares
Solution:
Total investment = 6500
Nominal value of 1 share = 120
Number of shares purchased = Y
Nominal value of Y shares = 120 × Y = 120Y
Dividend percentage = 20 %
Dividend = Rs 600
20 % of 120 = 20/100 × 120Y = 24
24Y = 600
Y = 600/24
Y = 25 shares
Marked value of 1 share = 6500/24 = 270.8

Example 6.
A man buys 25 Rs 100 shares of a company which pays an 8 percent dividend. He buys shares at such a price that he gets 13 percent of his money. At what price did he buy the shares.
Solution:
Nominal value of 1 share = Rs 100
Nominal value of 25 share = 100 × 25 = 2500
Dividend percentage = 8%
Dividend = 8% of 2500
= 8/100× 2500 = 200
Let market price of 1 share = Rs Y
Then Market price of 25 shares = Rs Y
Profit percentage on investment = 13%
13% of 25 Y = 200
3.25Y = 200
Y = 200/3.25
Y = 61.53

Example 7.
By purchasing Rs 35 shares for Rs 60 each a man gets a 2 percent profit on his investment. What rate of profit on his investment. What rate percent is the company paying? What is his dividend if he buys 40 shares?
Solution:
Nominal value of 1 share = Rs 35
Market value of 1 share = Rs 60
Profit percentage on investment = 2%
Then profit on 1 share = 2% of 60 = 2/100 × 60 = 1.2
Therefore dividend = 1.2/36 × 100 = 3.42
Number of shares purchased = 40
Then Dividend on 40 shares = 40 × 1.2 = 48

Example 8.
Hundred rupee shares of a company are available in the market at a premium of Rs 40. Find the rate of dividend given by the company when a man’s return on his investment is 20%
Solution:
The nominal value of 1 share = 100
Market value of 1 share = 100 + 40 = 140
Profit percentage on investment of 1 share = 20%
Then profit = 20% of Rs 140 = 20/100 × 140 = 28
Therefore dividend percentage = 28/100 × 100%
= 28%

Example 9.
Rs 60 shares of a company are quoted at a discount of 15 %. Find the rate of dividend given by the company the return on the investment on these shares being 18 percent
Solution:
Nominal value of 1 share = Rs 60
Marked value of 1 share = Rs 60 – 15% of Rs 60.
= 15/100 × 60 = 9
Profit percentage on investment = 18 %
Then profit on 1 share = 18% of Rs 9 = 18/100 × 9 = 1.69
Therefore dividend % = 1.62/60 × 100 = 2.7

Example 10.
A company declares a 7 percent dividend to the shareholders. If a man receives Rs 1440 as his dividend, find the nominal value of his shares
Solution:
Given that
Rate of dividend = 7%
Dividend = 1440
Let the nominal value of his share = x
We know that
Dividend = Rate of dividend × nominal value of share
So,
1440 = 7/100 × x
x = 1440×100/8 = 18,000 × 100 = 18,00,000
Nominal value of his share = 18,00,000