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Chapter 4.

Shares and Dividends


Formulae

1. The nominal value (N.V.) of a share is also called the Register value, printed value, Face
value (F.V.), etc.
2. The price of a share at any particular time is called its Market value (M.V.).
3. The market value of a share can be the same, more or less than the nominal value oi the
share depending upon the performance and profits of the company.
1. If the market value of a share is the same as its nominal value, the share is said to
be at par.
2. If the market value of a share is more than its nominal value, the share is said to be
above par or at a premium.
3. If the market value of a share is less than its nominal value, the share is said to be
below par or at a discount.
4. The profit, which a share-holder gets (out of the profits of the company) from his
investment in the company, is called dividend.
The dividend is always expressed as a percentage of the nominal value, of the share.
5. Sum invested = No, of shares bought × M.V. of 1 share
If the share is at par, market value = nominal value
i.e., M.V. = N.V.

Formulae Based Questions

Question 1. A man invested Rs. 45,000 in 15% Rs. 100 shares quoted at Rs. 125. When the
market value of these share rose to Rs. 140. He sold same shares, just enough to raise Rs.
8,400 calculate.
(i) The number of shares he still holds.
(ii) The dividend due to him on remaining shares.

Question 2. (i) Which in better investment: 7% Rs. 100 shares at Rs.120 or 8% Rs. 10 shares
at Rs. 13.50.
(ii) Mamta invested Rs. 10,846 in buying the shares of a company at Rs. 17 each. If the face
value of each share be? 10 and company paid 15% dividend at the end of the year, find the
dividend earned by her.
Question 3. Ajay owns 560 shares of a company. The face value of each share is Rs. 25. The
company declares a dividend of 9%. Calculate:
(i) The dividend that Ajay will get.
(ii) The rate of interest on his investment, if Ajay had paid Rs. 30 for each share.

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