A lady holds 1800, ₹100 shares of a company that pays 15% dividend annually. Calculate her annual dividend. If she had bought these shares at 40% premium, what percentage return does she get on her investment?

No. of shares held = 1800

Nominal Value per share = ₹100

Rate of Dividend = 15%

Annual Dividend = No. of shares x Rate of Dividend x Nominal Value per share

$= 1800 \times \dfrac{15}{100} \times 100 \\[0.5em] = 27000$

∴ Annual Dividend = ₹27000

As Shares are bought at 40% premium,

Market Value of one share

$= 100 + \Big(\dfrac{40}{100} \times 100\Big) \\[0.5em] = 100 + 40 \\[0.5em] = ₹140$

Total Investment = No. of shares x Market Value per share
= 1800 x 140
= ₹252000

$\% \text{Return} = \Big(\dfrac{\text{Annual Inc.}}{\text{Investment}} \times 100\Big)\% \\[0.5em] = \Big(\dfrac{27000}{252000} \times 100\Big) \% \\[0.5em] = \Big(\dfrac{2700}{252} \Big) \% \\[0.5em] = \Big(\dfrac{75}{7} \Big) \% \\[0.5em] = \bold{10\frac{5}{7}\%}$