Business Mathematics and Statistics · Class 11 Commerce
Ch 7Stock and Shares — Class 11 Business Mathematics and Statistics, concept-first.
When a company needs money to run and grow its business, it raises that money — its capital — by inviting the public to contribute. The total capital is broken into a large number of small, equal units so that even a person of modest means can contribute; each such unit is called a share.
Key concepts
Hover a concept to preview it and jump to its most relevant Q&A.
Cum-dividend and Ex-dividend Price
Around dividend time a share has a cum-dividend price, which includes the right to the forthcoming dividend, and an ex-dividend price, which excludes it, the two differing by exactly the dividend about to be paid (itself…
Most relevant Q&A
Chapter contents
The NCERT structure, section by section. Open a section to see its questions, then read the concept-first solution.
Concept and Features of Stock and Shares
When a company needs money to run and grow its business, it raises that money — its capital — by inviting the public to contribute.
Classification of Shares and Stock
The securities dealt with under this chapter fall into two broad families — shares (ownership securities of a company) and stock/fixed-income securities (which pay a fixed return).
Distinction Between a Share and Stock
Although "share" and "stock" are often used loosely to mean the same thing in everyday speech, in business mathematics they refer to two distinct kinds of security with different arithmetic convention…
Nominal (Face) Value versus Market Value
Every share or unit of stock has two different values attached to it, and keeping them apart is the foundation of the whole chapter.
Dividend, Income and Cost of Investment
This section brings the two golden rules of §4 together into the three quantities every stock-and-shares problem revolves around: the dividend on one share, the total annual income, and the cost of in…
Yield (Rate of Return on Investment) and Brokerage
The dividend rate tells you the return as a percentage of the face value; but an investor really wants to know the return as a percentage of the money actually invested — the yield.
Cum-dividend and Ex-dividend Price
When a company is about to pay a dividend, the market price of its share reflects whether the buyer will or will not receive that forthcoming dividend.
Exercises
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- Q9A ₹100 share pays a dividend of 10%, which is about to be declared, and is quoted at ₹95 ex-dividend. Find its cum-dividend price.Free
- Q10How much should a person invest in 8% shares of face value ₹100, available at a market price of ₹160, in order to obtain an annual income of…Free
- Q11Distinguish between a 'share' and 'stock' as securities, giving at least four points of difference.Preview
- Q12The dividend on a share is always calculated on its: (a) market value (b) face (nominal) value (c) yield (d) premiumPreview
- Q13A man holds ₹18,000 (nominal) of 12% stock and sells it at 90. He invests the entire sale proceeds in 15% stock available at 120. Find the c…Preview
More questions
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- Example 1A company's shares have a face value of ₹10 each and it declares a dividend of 8%. Find the total dividend received by a shareholder holding…Free
- Example 2A man invests ₹36,000 in buying ₹100 shares of a company at a market price of ₹120 each. If the company pays a dividend of 15%, find (i) the…Free
- Example 3A ₹100 share of a company pays a dividend of 12% and is available in the market at ₹150. Find the yield (rate of return) on this investment.Free
- Example 4Find the yield on 9% stock bought at 90 (i.e. ₹100 nominal of the stock costs ₹90 in the market).Preview
- Example 5An investor is choosing between two securities: (a) 8% stock available at 80, and (b) 10% stock available at 125. On the basis of yield, whi…Preview
- Example 6Find the yield on 12% stock bought at 95, if brokerage is ₹1 per ₹100 of nominal stock.Preview
- Example 7A person buys 200 shares of face value ₹100 each at a market price of ₹98, paying brokerage of ₹2 per share. The company pays a 9% dividend.…Preview
- Example 8A ₹100 share, on which a dividend of 16% is about to be declared, is quoted at ₹136 cum-dividend. Find its ex-dividend price.Preview