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    Question

    A trader buys 400 shares of a company at Rs. 80 each,

    paying 1% brokerage on the purchase value. The company declares a dividend of 12% on the face value of Rs. 50 per share, which he receives. He then sells all 400 shares at Rs. 88 each, paying 1% brokerage on the selling value.
    A Rs.4,228 Correct Answer Incorrect Answer
    B Rs.4,928 Correct Answer Incorrect Answer
    C Rs.2,928 Correct Answer Incorrect Answer
    D Rs.4,028 Correct Answer Incorrect Answer

    Solution

    ATQ, Cost: Purchase value = 400 × 80 = 32,000 Brokerage on purchase = 1% of 32,000 = 320 Total cost = 32,000 + 320 = 32,320 Dividend: Dividend per share = 12% of 50 = 0.12 × 50 = 6 Total dividend = 400 × 6 = 2,400 Selling: Selling value = 400 × 88 = 35,200 Brokerage on selling = 1% of 35,200 = 352 Net selling amount = 35,200 – 352 = 34,848 Overall profit: Total inflow = Net selling + Dividend = 34,848 + 2,400 = 37,248 Total outflow = 32,320 Profit = 37,248 – 32,320 = 4,928 Hence, Overall profit = Rs. 4,928

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