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Stocks and Shares Questions with Solutions

Three values matter for every share — Face Value (the printed value, dividend is always a percentage of this), Market Value (what you actually pay), and the dividend income itself — and most questions just connect these three through one investment. Here’s the concept, four fully worked examples, and a few to try yourself.

The concept, quickly

  • Face Value (FV) is the share’s printed/nominal value (commonly ₹100 unless stated otherwise) — dividend is always calculated as a percentage of FV, never of the market price.
  • Market Value (MV) is the price actually paid to buy the share. A share "at a premium of ₹X" means MV = FV + X; "at a discount of ₹X" means MV = FV − X.
  • Number of shares bought = Investment ÷ MV. Annual income = Number of shares × Dividend per share, where dividend per share = (Dividend % × FV) / 100.
  • Rate of return (yield) is the dividend as a percentage of what was actually paid: Yield% = (Dividend per share / MV) × 100 — this is what lets you compare returns across shares bought at different prices.

Worked examples

1. A man buys a ₹100 share at ₹120. If the dividend is 8%, find his income on an investment of ₹2,400.

Solution

  1. Number of shares = 2,400 / 120 = 20.
  2. Dividend per share = 8% of ₹100 = ₹8.
  3. Income = 20 × 8 = ₹160.

Answer: ₹160

2. A ₹100 share paying 10% dividend is bought at a premium of ₹25. Find the rate of return (yield) on the investment.

Solution

  1. Market value = 100 + 25 = ₹125.
  2. Dividend per share = 10% of ₹100 = ₹10.
  3. Yield = (10 / 125) × 100 = 8%.

Answer: 8%

3. A man invests ₹1,800 in buying ₹100 shares at a discount of 10%, and receives a dividend of 12%. Find his annual income.

Solution

  1. Market value = 100 − 10 = ₹90.
  2. Number of shares = 1,800 / 90 = 20.
  3. Dividend per share = 12% of ₹100 = ₹12. Income = 20 × 12 = ₹240.

Answer: ₹240

4. Find the market value of a ₹100 share paying 10% dividend, if the rate of return (yield) to the investor is 8%.

Solution

  1. Dividend per share = 10% of ₹100 = ₹10.
  2. Yield% = (Dividend / MV) × 100, so 8 = (10 / MV) × 100.
  3. MV = (10 / 8) × 100 = ₹125.

Answer: ₹125

Try these yourself

Work out the market value and dividend per share first, then check against the answer.

1. A man buys a ₹100 share at ₹150. If the dividend is 9%, find his income on an investment of ₹3,000.

Answer: ₹180

2. A ₹100 share paying 12% dividend is bought at a premium of ₹20. Find the rate of return.

Answer: 10%

3. A man invests ₹1,600 in buying ₹100 shares at a discount of 20%, and receives a dividend of 15%. Find his annual income.

Answer: ₹300

Where this comes up

Stocks and Shares is a sub-topic within the Quantitative/Numerical Aptitude section of exams Pariksha Saathi covers — SSC CGL, SSC MTS, SSC CHSL, IBPS PO, IBPS Clerk, SBI PO and SBI Clerk.

Practice more Stocks and Shares questions

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