A man invests ₹4500 in shares of a company which is paying 7.5% dividend. If ₹100 shares are available at a discount of 10%, find

(i) the number of shares he purchases.

(ii) his annual income.

Nominal Value per share = ₹100

Rate of Dividend = 7.5%

Total Investment = ₹4500

As the shares are bought at a discount of 10%,

Market Value per share = ₹100 - ₹(10% of 100)

$= ₹100 - ₹\Big(\dfrac{10}{100} \times 100 \Big) \\[0.5em] = ₹100 - ₹10 \\[0.5em] = ₹90$

(i) Number of shares purchased

$= \dfrac{\text{Total Investment}}{\text{MV per share}} \\[0.7em] = \dfrac{4500}{90} \\[0.5em] = \bold{50}$

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

$= 50 \times \dfrac{7.5}{100} \times 100 \\[0.5em] = \bold{₹375}$

Hence, his annual income = ₹375