Aptitude - Stocks and Shares - Discussion

Actually, why we want to find face value..can anyone explain me

face value means actual valuu here.......

face value means shares orginal price.

Face value is the shares original (nominal) price. That has to be detemined before knowing the annual income of the investor.

There is formula why we are want use this method?

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!

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

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. :).

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 :).

How 1₁₀ shares mean 10 people?

Secondly, face value is the price quoted /printed on share certificate, here amt quoted is 1_8.25 but we are taking it as market value and 1₁₀ as face value.

Please anyone explain?

Thanks in advance.