Gaurav wants to invest 3600. He invests Rs 750 in hundred-rupee shares of 3.5% at Rs75, Rs 1050 in shares of 3% at Rs 70 and the remaining in shares on 6% . If his total yield is 5(5/9)% of his investment, at what price did he buy share of 6%?
Answer & explanation
Correct answer: option 2
The correct answer is option (2) : ₹90
Amount invested in ₹75 shares = ₹ 750
∴ No. of ₹75 shares $=\frac{₹750}{₹75}= 10$
Amount invested in 70 shares $= ₹1050$
No. of shares $= 15$
Amount invested in shares paying 6%
$=₹3600-(₹750+₹1050)=₹1800$
Total yield $=5\frac{5}{9}$%of ₹3600 = ₹ 200
1 share of ₹ 75 → dividend = $₹\frac{3.5}{100}×100= ₹ 3.5$
10 shares of ₹ 75 → dividend =$₹35$
1 shares of ₹ 70 → dividend =$₹3$
10 shares of ₹ 70 → dividend =$₹3×15=₹45$
Thus dividend received from share paying 6%
$=₹200-(₹35+₹45)=₹120$
When dividend is ₹6, then no of shares = 1
₹120, then no. of shares $=₹\frac{120}{₹6}= 20$
∴ Market price of 1 share of 6% $=\frac{₹1800}{20}= ₹90$