Stocks & Shares

Everything here rests on one distinction:

• Face value is printed on the share and is always ₹100 unless the question says otherwise. The dividend percentage is on the face value — a "9% stock" pays ₹9 a year per ₹100 of stock, whatever it costs to buy.
• Market value is what you actually pay. At a premium of ₹20 it costs ₹120; at a discount of ₹20, ₹80; "at par" means ₹100.

The formulas follow directly:

• Number of ₹100 shares = investment ÷ market price
• Annual income = number of shares × dividend
• Yield% = dividend × 100 ÷ market price — the return on money invested
• Brokerage is added to the market price when buying and subtracted when selling.

The single most common mistake is calling the "9%" in "9% stock" the return. It is not — it is the dividend on the face value. If you buy that stock at ₹120, your actual return is 9 × 100/120 = 7.5%. Whenever a question asks "yield" or "return on investment", the denominator is the market price; whenever it asks "income", the multiplier is the dividend.

Rule of thumb: buy above par → yield below the stated rate; buy below par → yield above it.

Face value = ₹100 · shares = investment ÷ market price · income = shares × dividend · yield% = dividend × 100 / market price · buying: MP + brokerage

What annual income does ₹9,600 invested in a 9% stock at ₹120 give? → Shares of ₹100 face value bought = 9600 ÷ 120 = 80. Income = 80 × ₹9 = ₹720. Sanity check via yield: yield% = 9 × 100/120 = 7.5%, and 7.5% of ₹9,600 is ₹720. Note the income is not 9% of ₹9,600 (₹864) — the 9% sits on the face value, not on the money spent.