Matthew invested $ 67200 in $ 100 shares which are quoted at $ 120. Calculate the income if 12% dividend is declared on the shares.

 

Answer:

Basically this question belongs to portion of income and returns from shares , therefore before solving this question u must have knowledge of all terms associated with income and retrurns from shares , like Nominal value , Market value , Dividend rate, etc

Step-by-step explanation

According to question ,

Total sum invested by mathew is $67200 & Market value is $120 , Nominal value (N.V) is $100

Total investment = $67200

Quoted price or Market value(M.V) of each share = $120

So , no. of shares purchased at quoted price = $67200 /$120 = 560

Dividend rate is 12% i.e

Dividend on 1 share = 12% of N.V = 12% 0f $100 = $12

Total income is = No. of shares * dividend per share

= 560 * $12

= $6720 ans