NumericalEasy1 mark
9(c)
Sachin invests ₹ 8500 in 10%, ₹ 100 shares at ₹ 170. He sells the shares when the price of each share rises by ₹ 30. He invests the proceeds in 12%, ₹ 100 shares at ₹ 125. Find:
the change in his annual income.
Topic: Shares, dividend and return
Previous-year question practice database
Answer
Exam answer
Old annual income:
Dividend per old share = 10% of ₹100 = ₹10
Old annual income = 50 × 10 = ₹500
New annual income:
Dividend per new share = 12% of ₹100 = ₹12
New annual income = 80 × 12 = ₹960
Increase in annual income = 960 − 500 = ₹460
Answer:
Annual income increases by ₹460.
Explanation
Compare the dividend income from the original 50 shares with the dividend income from the new 80 shares.
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