Maths Mutual Shares and Funds

SHARES AND MUTUAL
FUNDS
SHARES
CONCEPT OF SHARES
• LIMITED COMPONY OR JOINT STOCK COMPONY
• PROMOTERS
• SHARE
• SHARE HOLDER
FORMULA:
𝑇𝑜𝑡𝑎𝑙 𝑖𝑛𝑣𝑒𝑠𝑡𝑚𝑒𝑛𝑡
𝑁𝑜. 𝑜𝑓 𝑆ℎ𝑎𝑟𝑒𝑠 =
𝐹𝑉 𝑜𝑓 𝑜𝑛𝑒 𝑠ℎ𝑎𝑟𝑒
VALUE OF SHARES
• FACE VALUE
• MARKET VALUE
If MV = FV implies at par
If MV < FV implies below par or at discount
If MV > FV implies above par or at primium
TYPES OF SHARES
➢PREFERENCE SHARES
➢EQUITY SHARES
➢BONUS SHARES
BROKERAGE
Find sum due to Shikha when she sold 200 shares at market
value of Rs. 40 per share,with brokerage of 0.3%.
Soln: MV per share =Rs. 40
Sum due to her=Rs. 40 ∗ 200 = 8000
Brokerage is 0.3%
0.3
Brokerage born by her =Rs. 8000 ∗ = 24
100
Net amount she reveives =Rs.8000 − 24 = 7976.
How many shares of market value Rs. 120 each, can be

purchased for Rs. 60180 brokerage being 0.3%.
Soln: MV per share=Rs. 120
Brokerage =0.3%
0.3
Brokerage per share=Rs.120 ∗ = 0.36
100
Cost of one share=Rs. 120 + 0.36 = 120.36
60180
No. of shares= = 500.
120.36
Shyam bought shares of Company at market value of Rs. 300
per share, from Stokck Brokers. Within a week he sold shares at
rate of Rs. 200. If the brokerage charged by his broker is 0.4 %
and assuming that Shyam did not receive any other benefits like
dividend or bonus shares from the company, find number of
shares traded by him, if his net loss in deal was Rs. 4284.
a) While buying : mv per share=Rs.300
Brokerage=0.4%
0.4
Brokerage per share=Rs. 300 ∗ = 1.2
100
Cost of one share=Rs.(300+1.2)=301.2
b) While selling : mv per share=Rs. 200
Brokerage =0.4%
0.4
Brokerage per share=Rs.200 ∗ = 0.8
100
Price received per share =Rs(200-0.8)=199.2
Loss per share =Rs.(301.2-199.2)=102
𝑡𝑜𝑡𝑎𝑙 𝑙𝑜𝑠𝑠 4284
Total no. of shares traded= = = 42.
𝑙𝑜𝑠𝑠 𝑝𝑒𝑟 𝑠ℎ𝑎𝑟𝑒 102
DIVIDENDS
FORMULAE
𝐷𝑖𝑣𝑖𝑑𝑒𝑛𝑑 𝑝𝑒𝑟 𝑠ℎ𝑎𝑟𝑒 = 𝑓𝑣 ∗ 𝑟𝑎𝑡𝑒 𝑜𝑓 𝑑𝑖𝑣𝑖𝑑𝑒𝑛𝑑
𝑇𝑜𝑡𝑎𝑙 𝑑𝑖𝑣𝑖𝑑𝑒𝑛𝑑 = 𝑁𝑜. 𝑜𝑓 𝑠ℎ𝑎𝑟𝑒𝑠 ∗

(𝐷𝑖𝑣𝑖𝑑𝑒𝑛𝑑 𝑝𝑒𝑟 𝑠ℎ𝑎𝑟𝑒)
Find the number of shares if total dividend at 13% on the Rs. 2 per
share was Rs. 612.56.
Ans :
𝐷𝑖𝑣𝑖𝑑𝑒𝑛𝑑 𝑝𝑒𝑟 𝑠ℎ𝑎𝑟𝑒 = 𝑓𝑣 ∗ 𝑟𝑎𝑡𝑒 𝑜𝑓 𝑑𝑖𝑣𝑖𝑑𝑒𝑛𝑑
13
=2∗ = 0.26
100
𝑇𝑜𝑡𝑎𝑙 𝑑𝑖𝑣𝑖𝑑𝑒𝑛𝑑 = 𝐷𝑖𝑣𝑖𝑑𝑒𝑛𝑑 𝑝𝑒𝑟 𝑠ℎ𝑎𝑟𝑒 ∗ 𝑛𝑜. 𝑜𝑓 𝑠ℎ𝑎𝑟𝑒𝑠
612.56 = 0.26 ∗ 𝑛𝑜. 𝑜𝑓 𝑠ℎ𝑎𝑟𝑒𝑠.
612.56
𝑁𝑜. 𝑜𝑓 𝑠ℎ𝑎𝑟𝑒𝑠 = = 2356.
0.26
RATE OF RETURN
FORMULA :
𝐷𝑖𝑣𝑖𝑑𝑒𝑛𝑑 𝑝𝑒𝑟 𝑠ℎ𝑎𝑟𝑒
𝑅𝑎𝑡𝑒 𝑜𝑓 𝑟𝑒𝑡𝑢𝑟𝑛 = ∗ 100
𝐼𝑛𝑣𝑒𝑠𝑡𝑚𝑒𝑛𝑡 𝑖𝑛 𝑜𝑛𝑒 𝑠ℎ𝑎𝑟𝑒
❖ ‘Better’ Buy
Suresh bought one share of face value Rs. 100,at Rs. 200. If the
company declared a dividend of 300%.
a) What will be his dividend?
b) What will be his rate of return?
Ans: FV of one share =Rs. 100
a) 𝐷𝑖𝑣𝑖𝑑𝑒𝑛𝑑 𝑝𝑒𝑟 𝑠ℎ𝑎𝑟𝑒 = 𝑓𝑣 ∗ 𝑟𝑎𝑡𝑒 𝑜𝑓 𝑑𝑖𝑣𝑖𝑑𝑒𝑛𝑑
300
= 100 ∗ = 𝑅𝑠. 300
100
𝐷𝑖𝑣𝑖𝑑𝑒𝑛𝑑 𝑝𝑒𝑟 𝑠ℎ𝑎𝑟𝑒
b) 𝑅𝑎𝑡𝑒 𝑜𝑓 𝑟𝑒𝑡𝑢𝑟𝑛 = ∗ 100
𝐼𝑛𝑣𝑒𝑠𝑡𝑚𝑒𝑛𝑡 𝑖𝑛 𝑜𝑛𝑒 𝑠ℎ𝑎𝑟𝑒
300
= *100
200
= 150 %
An investor bought 300 shares of JSV company , whose face
value was Rs. 10 per share. Company declared 80% dividend on
shares. However if his rate of return on dividend is only 1.6%. Find
the market value at which he purchased the shares.
Soln:
Let mv per share=M
Dividned is 80%
80
Dividend per share=Rs.10 ∗ =8
100
Rate of return is 1.6%
𝑑𝑖𝑣𝑖𝑑𝑒𝑛𝑑 𝑝𝑒𝑟 𝑠ℎ𝑎𝑟𝑒
Rate of return = ∗ 100
𝑖𝑛𝑣𝑒𝑠𝑡𝑚𝑒𝑛𝑡 𝑝𝑒𝑟 𝑠ℎ𝑎𝑟𝑒
8∗100
1.6=
𝑀
M=Rs.500
A person bought shares of company at mv of Rs.24 per share,
the fv of share being Rs.10.If his rate of return is 25% find dividend
declared by the company.
Two companies A and B have shares with face values of Rs.100
each and the market price of their shares are Rs.132 and Rs.140
respectively. If the dividends declared by the company A is 16%
and company B is 18%, which company is a ‘better buy’.
Soln: Company A
Fv=Rs.100 mv=Rs.132
16
Dividend =16% dividend per share =Rs ∗ 100 = 16
100
𝑑𝑖𝑣𝑖𝑑𝑒𝑛𝑑 𝑟𝑒𝑐𝑖𝑒𝑣𝑒𝑑 𝑝𝑒𝑟 𝑠ℎ𝑎𝑟𝑒
Rate of return= ∗ 100
𝑚𝑎𝑟𝑘𝑒𝑡 𝑣𝑎𝑙𝑢𝑒 𝑜𝑓 0𝑛𝑒 𝑠ℎ𝑎𝑟𝑒
16∗100
= = 12.1212
132
Company B
Fv=Rs.100 mv=Rs.140
18
Dividend =18% dividend per share =Rs ∗ 100 = 18
100
𝑑𝑖𝑣𝑖𝑑𝑒𝑛𝑑 𝑟𝑒𝑐𝑖𝑒𝑣𝑒𝑑 𝑝𝑒𝑟 𝑠ℎ𝑎𝑟𝑒
Rate of return= ∗ 100
𝑚𝑎𝑟𝑘𝑒𝑡 𝑣𝑎𝑙𝑢𝑒 𝑜𝑓 𝑖𝑛𝑒 𝑠ℎ𝑎𝑟𝑒
18∗100
= = 12.857
140
Company B is ‘better buy ‘.
An investor buys 250 shares at market value of Rs. 80 each. How
much money is required for the transaction if the brokerage was
0.5%.
Nisha sold 60 shares of market value Rs. 75 per share at the
brokerage of 0.4%. Calculate the amount she received during
this transaction.
A company paid Rs.97890 to Motilal oswal, for buying the
shares of Tech Mahindra at the market value of Rs.650 per share.
If the brokerage charged by Motilal oswal was 0.4%, find
number of shares purchased by company.
Find the number of shares sold for Rs.74700 by a company, if the
market value of each share was Rs.60 and brokerage was 0.4%.
Manav bought shares of TCS at market price of Rs.620 per
share. Before receiving any dividend from the company , he
had to sell all the shares at market price of Rs.520 each. If the
brokerage is 0.5%, and his loss was Rs.2114, find the number of
shares he bought.
An investor bought 50 shares of a company at market value of
Rs. 350 each, the face value of each share being Rs.100. The
company declared dividend of 20% on shares. After receiving
the dividend, he sold the shares at market value of Rs.340 per
share. Find the net loss/gain of investor in the entire deal, if the
brokerage charges being 0.3%.
Aditya bought 30 shares of face value Rs.10, at the market
value of Rs.25 each. If the company declared dividend of 20%
per share, what will be he get , per share, and on the entire
investment. Also find his rate of return.
An investor bought 500 shares of company at market value of
Rs.520 per share. If the face value being Rs100 per share. If his
rate of return is 5%, find the percentage of dividend declared
by the company.

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SHARES AND MUTUAL

How many shares of market value Rs. 120 each, can be

𝑇𝑜𝑡𝑎𝑙 𝑑𝑖𝑣𝑖𝑑𝑒𝑛𝑑 = 𝑁𝑜. 𝑜𝑓 𝑠ℎ𝑎𝑟𝑒𝑠 ∗

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