# Aptitude - Stocks and Shares - Discussion

Discussion Forum : Stocks and Shares - General Questions (Q.No. 7)
7.
A man invested Rs. 4455 in Rs. 10 shares quoted at Rs. 8.25. If the rate of dividend be 12%, his annual income is:
Rs. 207.40
Rs. 534.60
Rs. 648
Rs. 655.60
Explanation:

 Number of shares = 4455 = 540. 8.25

Face value = Rs. (540 x 10) = Rs. 5400.

 Annual income = Rs. 12 x 5400 = Rs. 648. 100

Discussion:
14 comments Page 1 of 2.

NoNii said:   7 years ago
Well explained, Thank you @Gowthami and @Arthi.

Anusmita said:   7 years ago
Someone is saying 4455 is market value and someone is saying it is face value. Can someone say if it is market or face value?

And in the last step, we know annual income = (dividend/market value *face value).

So then why we are putting 100 in place of market value?

Pratik said:   9 years ago
Annual income depends on face value only?

Sundar said:   9 years ago
4455/8.25 = 5.4 then how 540 came there?

Amit said:   10 years ago
How 110 shares mean 10 people?

Secondly, face value is the price quoted /printed on share certificate, here amt quoted is 18.25 but we are taking it as market value and 110 as face value.

Priyanka said:   10 years ago
Check out here.

Face value== 4455.
No of shares ==10.

Dividend==12%.
Market value==8.25.
Annual income==?

By using formula== 12% of face value== 12/100*4455==534.6.
Annual income of 4455== 534.6/8.25*100==6480 :).

Its very simple.

Here the initial investment made is 4455.
The market value is 8.25.

The profit obtained is being shared by 10 people.

Now for 8.25 we are dividing into 10 shares.
So investment for 8.25 = 10.

Then investment for 4455 = 10/8.25*4455.

So, income = 5400.

Now, for 12%,

5400*12/100=648. :).
(2)

What is the mean of Rs 10 shares quoted at Rs 8.25?

In the above question, they have asked us to find out his annual income which can only be done by using dividend. Dividend can be calculated only with face value but not the market value. Thats the reason first we found out number of shares and calculated the face value and in turn we used it in calculating his earnings.

Dividend is calculated only on face value because, dividend means the earnings per year for a share holder. The company normally calculates its profit percentage and adds it to the face value and will pay to the share holder but the company won't calculte it on market value. Thats the reason face value is mandatory in calculating the dividend or annual income.

Hope you understand!
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