Shares and Dividends

Q: Define the face value of a share. Give two other names for it.

The face value of a share is the value printed on the share certificate, fixed by the company when it divides its capital into shares. It is also called the nominal value or the par value.

Q: Define the market value of a share. Why does it change from day to day while the face value does not?

The market value is the price at which the share can be bought or sold in the share market on a given day. It changes with demand from buyers and sellers, which depends on the company's performance; the face value is fixed when the shares are issued.

Q: What is meant by a share at a premium? A ₹20 share is quoted at ₹27. Find the premium.

A share is at a premium when its market value is more than its face value. Premium = 27 - 20 = 7, that is ₹7.

Q: A ₹100 share is at a 15% discount. What is its market value?

Discount = 15 rupees, so MV = 100 - 15 = 85, that is ₹85.

Q: Why is the dividend always worked out on the face value and not on the market value?

The company declares its rate of dividend on the fixed, printed value of the share. What a buyer paid on the market is a matter between the buyer and the seller, and does not concern the company.

Q: Find the annual income from 600 shares of ₹10 each when the dividend is 7%.

Income = 600 × (7)/(100) × 10 = 420, that is ₹420.

Q: A person receives ₹1,350 as dividend from 15% ₹100 shares. How many shares does the person hold?

Dividend per share = 15 rupees, so n = (1350)/(15) = 90 shares.

Q: How many ₹50 shares quoted at ₹62.50 can be bought for ₹12,500?

n = (12 500)/(62.50) = 200 shares.

ICSE Class 10 · Mathematics · Chapter 3

What this chapter covers

Companies, shares and shareholders
Face value of a share
Market value and premium
Dividend and rate of dividend
Income from shares
Investment and the number of shares bought
Return on investment
Comparing and changing investments
Solving shares problems step by step

Key points

A share is one of the equal units into which a company's capital is divided; its owner is a shareholder.
Face value (FV), also called nominal or par value, is printed on the share and never changes.
Market value (MV) is the day's buying and selling price; you always pay MV to buy a share and receive MV when you sell it.
A share is at par when MV = FV, at a premium when MV > FV (premium = MV − FV), and below par when MV < FV.
Dividend is the part of the profit paid to shareholders; the rate of dividend is a percentage of the face value.
Income = number of shares × rate of dividend × FV; the market value never enters the income formula.
Investment = number of shares × MV, so number of shares = Investment ÷ MV.
Return = (Income ÷ Investment) × 100, which for one share is (r × FV)/(MV)%.
At par the return equals the rate of dividend; at a premium it is lower, and below par it is higher.
To compare investments, compare their returns, not their rates of dividend.
Brokerage and fractional shares are not included at this level.

Questions answered

Define the face value of a share. Give two other names for it.

The face value of a share is the value printed on the share certificate, fixed by the company when it divides its capital into shares. It is also called the nominal value or the par value.

Define the market value of a share. Why does it change from day to day while the face value does not?

The market value is the price at which the share can be bought or sold in the share market on a given day. It changes with demand from buyers and sellers, which depends on the company's performance; the face value is fixed when the shares are issued.

What is meant by a share at a premium? A ₹20 share is quoted at ₹27. Find the premium.

A share is at a premium when its market value is more than its face value. Premium = 27 - 20 = 7, that is ₹7.

A ₹100 share is at a 15% discount. What is its market value?

Discount = 15 rupees, so MV = 100 - 15 = 85, that is ₹85.

Why is the dividend always worked out on the face value and not on the market value?

The company declares its rate of dividend on the fixed, printed value of the share. What a buyer paid on the market is a matter between the buyer and the seller, and does not concern the company.

Find the annual income from 600 shares of ₹10 each when the dividend is 7%.

Income = 600 × (7)/(100) × 10 = 420, that is ₹420.

A person receives ₹1,350 as dividend from 15% ₹100 shares. How many shares does the person hold?

Dividend per share = 15 rupees, so n = (1350)/(15) = 90 shares.

How many ₹50 shares quoted at ₹62.50 can be bought for ₹12,500?

n = (12 500)/(62.50) = 200 shares.

Past board exam questions

ICSE 2027 sample paper · 1 mark

A man buys 50, ₹ 100 shares of a company at ₹ 125 paying 6% dividend per annum. At the end of the year, the company will pay a total dividend on:

₹ 100
₹ 125
₹ 5000
₹ 6250

Show answer

₹ 5000

ICSE 2027 sample paper · 3 marks

Ms. Kaur invested ₹ 8000 in buying ₹ 100 shares of a company paying 6% dividend at ₹ 80. After a year, she sold these shares at ₹ 75 each and invested the proceeds including the dividend received during the first year in buying ₹ 20 shares paying 15% dividend at ₹ 27 each. Find the: (a) dividend received by her during the first year. (b) number of shares she purchased using the total proceeds including the dividend.

Show answer

(a) Number of shares = (8000)/(80) = 100. Dividend = (6)/(100) × 100 × 100 = ₹ 600. (b) Sale proceeds = 100 × ₹ 75 = ₹ 7500. Total = ₹ 7500 + ₹ 600 = ₹ 8100. Number of new shares = (8100)/(27) = 300.

ICSE 2026 board paper · 1 mark

Asha buys ₹ 20 shares of a company which pays 9% dividend at such a price that she gets a return of 12% on her investment. At what price did she buy each share?

₹ 20
₹ 15
₹ 25
₹ 18

Show answer

₹ 15

ICSE 2026 sample paper · 1 mark

The sum of money required to buy 50, ₹ 40 shares at ₹ 38.50 is:

₹ 1,920
₹ 1,924
₹ 1,925
₹ 1,952

Show answer

₹ 1,925

ICSE 2026 sample paper · 3 marks

Ms. Kaur invested ₹ 8,000 in buying ₹100 shares of a company paying 6% dividend at ₹ 80. After a year, she sold these shares at ₹75 each and invested the proceeds including the dividend received during the first year in buying ₹ 20 shares, paying 15% dividend at ₹ 27 each. Find the: (a) dividend received by her during the first year. (b) number of shares purchased by her using the total proceeds.

Show answer

(a) Number of shares = (8000)/(80) = 100. Annual dividend = 100 × 6% of ₹ 100 = 100 × ₹ 6 = ₹ 600. (b) Sale proceeds = 100 × ₹ 75 = ₹ 7,500. Total proceeds = 7,500 + 600 = ₹ 8,100. Number of ₹ 20 shares bought at ₹ 27 = (8100)/(27) = 300.

ICSE 2026 board paper · 3 marks

Kabir bought 120 shares of a company with nominal value ₹ 100, available at a premium of ₹ 25. Find: (a) the money invested by Kabir in buying these shares. (b) the rate of dividend, if he received ₹ 1,080 as dividend from these shares after one year. (c) his rate of return.

Show answer

(a) Market value of one share = ₹ 100 + ₹ 25 = ₹ 125. Investment = 120 × ₹ 125 = ₹ 15,000. (b) Dividend per share = ₹ 1,080 ÷ 120 = ₹ 9 on a nominal value of ₹ 100, so rate of dividend = 9%. (c) Rate of return = (1080)/(15000) × 100 = 7.2%.

ICSE 2025 board paper · 1 mark

A man invested in a company paying 12% dividend on its share. If the percentage return on his investment is 10%, then the shares are:

at par
below par
above par
cannot be determined

Show answer

above par

ICSE 2025 compartment paper · 1 mark

Percentage return on ₹100, 12% share of a company bought at 4% discount is:

10%
12%
12.5%
16%

Show answer

12.5%