ICSE Class 10 Maths Chapter 04 Shares and Dividend

Chapter 4

Shares and Dividend

Points To Remember

1. The total money needed is called the Capital and whole capital is divided with equal small units, called Shares.

The person who invests money in shares is called share holder.

2. Dividend. The annual profit distributed among share holders is called dividend.

3. Nominal Value (N.V.) of a Share. The value of a share printed on the share certificate is all Nominal Value or Face Value or Par Value.

Note. Dividend is always reckoned on the face value of a share.

4. Market Value of a Share. The shares can be bought or sold in the market through stock exchange. The value for which a share is sold or bought in the market is called Market Value. It can be equal, more or less than its face value.

A share is said to be:

(i) At par, if its market value is the same as its face value.

(ii) At Premium or Above Par, if its market value is more than its face-value.

(iii) At Discount or Below Par, if its market value is less than its face-value.

Note. Market Value of a share changes from time to time.

Exercise 4

Q. 1. Find the market value of 325, Rs. 100 shares at premium of Rs. 18.

Sol. Face value of a share = Rs. 100

Market value of a share = Rs. 100 + 18 = Rs. 118

No. of shares = 325

Market value of 325 shares = Rs. 118 x 325 = Rs. 38350 Ans.

Q. 2. A man buys 500, Rs. 100 shares at Rs. 14 below par. How much money does he pay?

Sol. Market value of each share = Rs. 100 - Rs. 14 = Rs. 86

No. of shares = 500

Total money to be paid for the purchase of 500 shares = Rs. 86 x 500 = Rs. 43000 Ans.

Q. 3. How much money will be required to buy 125, Rs.25 shares at a discount of Rs. 7?

Sol. No. of shares = 125

Market value of each share = Rs. 25 - Rs. 7 = Rs. 18

Total amount to be required = Rs. 18 x 125 = Rs. 2250 Ans.

Q. 4. Find the investment in buying 150, Rs. 30 shares at Rs. 6 above par.

Sol. No. of shares = 150

Market value of each share = Rs. 30 + 6 = Rs. 36

Total investment required = Rs. 36 x 150 = Rs. 5400 Ans.

Q. 5. Find the dividend received on 260 shares of Rs. 25 each, when 8% dividend is declared.

Sol. No. of shares = 260

Face value of each share = Rs. 25

Rate of dividend = 8%

Total investment = Rs. 25 x 260 = 6500

Total dividend received = Rs. 6500 x \(\frac{8}{100}\) = Rs. 520 Ans.

Q. 6. If the dividend received from 9% Rs. 20 shares is Rs. 1620, find the number of shares.

Sol. Total dividend = Rs. 1620

Rate = 9%

Total investment = Rs. \(\frac{1620 \times 100}{9}\) = Rs. 180 x 100 = Rs. 18000

Face value of each share = Rs. 20

No. of shares = Rs. 18000 ÷ Rs. 20 = 900 Ans.

Q. 7. By investing Rs. 12750 in a company, paying 8% dividend, an annual income of Rs. 1200 is received. What is the market value of each Rs. 100 share?

Sol. Total investment = Rs. 12750

Rate of dividend = 8%

Face value of each share = Rs. 100

Total dividend received = Rs. 1200

No. of shares = \(\frac{1200}{8}\) = 150

Now, market value of 150 shares = Rs. 12750

and market value of each share = Rs. \(\frac{12750}{150}\) = Rs. 85 Ans.

Teacher's Note

Understanding shares and dividends helps students grasp how companies raise capital and distribute profits, similar to how a school might divide fundraising money among various departments.

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