Matthew invested $ 67200 in $ 100 shares which are quoted at $ 120. Calculate the income if 12% dividend is declared on the shares.
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Matthew invested $ 67200 in $ 100 shares which are quoted at $ 120. Calculate the income if 12% dividend is declared on the shares.
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Total sum invested = $ 67200 and market value (M.V.) of each share = $ 120.
Therefore, number of shares bought = $67200÷$120 = 560
According to the problem, dividend on 1 share = 12% of face value/nominal value.
= 12% of $ 100
= $ 12
Therefore, the total income from the shares = 560 × $ 12 = $ 6720
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