In order to calculate the number of shares, you have to multiply your share price by the number of shares you own. Let us discuss the calculation of Income, Return, and Number of Shares with examples from here. The output is the number of shares on which the market capitalized number was based. For your convenience, we have provided the formulas for the calculation of Income, Return, and Number of Shares. Hence we suggest you read the article thoroughly and practice well for the exams.
Do Refer:
Calculating Income, Return, and Number of Shares Formulas
- Annual income = nrF/100
Annual return = annual income/ investment in shares × 100%
Where
n = number of shares held by a shareholder
r = rate of dividend per annum
F = face value - Calculation of a number of shares:
Number of share held = investment/ investment for the share (i.e.,FVorMVasthecasemaybe)
Or
= annual income/income from one share
Or
total face value/face value of one share.
Solved Problems on How to Calculate Income, Return, and Number of Shares
Example 1.
Mohan buys $ 200 shares at a $ 30 premium in a company paying 16% divided. Find the marked value of 400 shares, his annual income, and his percentage income.
Solution:
Market value of one share = $ 200 + $ 30 = $ 230
Therefore, the market value of 400 shares = 400 × $ 230 = $ 92,000
Annual income = Number of shares × Rate of dividend × nominal value or face value of 1 share
= 400 × 16/100 × 200 = $ 12800
$ 12800 is the income obtained on investing $ 92000
The percentage income = 12800/92000 × 100 % = 13.91%
Therefore the percentage income = 13.91%
Example 2.
Kaushal invests in shares for which we have the condition “8% of $ 150 shares at $ 180”. What is the annual income of a person holding 130 such shares? Also, find his annual profit percentage.
Solution:
8% of $ 150 shares at $ 180” means that
The annual income from 1 share of NV $ 150 is $ 8, invest for 1 share being $ 180.
Therefore, the annual income from 150 shares = nrF100
Where
n = number of shares held by a shareholder
r = rate of dividend per annum
F = face value
= 130×8×$150/100
= 130 × $8 × 15/10 = $ 1560
His investment for 130 shares = 130 × $ 180 = $ 23400
Therefore, the required profit percentage (return) = $1560/$23400 × 100% = 6.66%
Example 3.
Elsa bought some shares of $ 20 at par value which yields a 20% dividend per annum. At the end of one year, he received $ 3000 as a dividend. How many shares did he buy?
Solution:
Let the number of shares be n.
Then we know that the formula is
Annual income or dividend = nrF100
Where
n = number of shares held by a shareholder
r = rate of dividend per annum
F = face value
$ 3000 = n×20×$20/100
n = 3000×100/20×20 = 750
Therefore, the required number of shares = 750
Example 4.
Meena buys $ 400 shares at a $ 60 premium in a company paying 19% divided. Find the marked value of 800 shares, his annual income, and his percentage income.
Solution:
Market value of one share = $ 400 + $ 60 = $ 460
Therefore, the market value of 800 shares = 800 × $ 460 = $ 3,68,000
Annual income = Number of shares × Rate of dividend × nominal value or face value of 1 share
= 800 × 19/100 × 400 = $ 60,800
$ 12800 is the income obtained on investing $ 92000
The percentage income = 60,800/3,68,000 × 100 % = 16.52%
Therefore the percentage income = 16.52%
Example 5.
Alexander bought some shares of $ 30 at par value which yields a 30% dividend per annum. At the end of one year, he received $ 6000 as a dividend. How many shares did he buy?
Solution:
Let the number of shares be n.
Then we know that the formula is
Annual income or dividend = nrF100
Where
n = number of shares held by a shareholder
r = rate of dividend per annum
F = face value
$ 6000 = n×30×$30/100
n = 6000×100/30×30 = 666.6
Therefore, the required number of shares = 666.6
FAQs on Calculation of Income, Return and Number of Shares
1. What is the formula for calculating the number of shares?
Take the market capitalization figure and divide it by the share price. The result is the number of shares on which the market capitalization number was based.
2. How do you calculate annual share income?
EPS is calculated by subtracting any preferred dividends from a company’s net income and dividing that amount by the number of shares outstanding.
3. How do you calculate the number of shares of common stock?
Subtract treasury shares from issued shares to determine the total number of outstanding common stock shares.