MathsICSE Class 10 · Shares and Dividends

Dividend and Annual Income from Shares: Formula and Solved Questions (ICSE Class 10)

Updated 15 October 2026 · Fact-checked

A dividend is the share of profit a company pays on each share, always calculated on the face value. Dividend per share = face value × rate of dividend/100, and annual income = number of shares × face value × rate/100. The market price you paid does not change the dividend; it only changes how many shares your money buys.

Market value only decides how many shares you buy; the dividend rate is applied to face value, so income is 200 × ₹9 = ₹1,800.

Illustration drawn for QuestionBuddy.

Understand Dividend and Annual Income from Shares

A company divides its capital into equal parts called shares. Each share has a face value (FV, also called nominal or par value), printed on the share certificate, and a market value (MV), the price at which it is bought and sold on the market. When the company makes a profit it may pay part of it to shareholders as a dividend, declared as a percentage, such as '12% dividend'.

The one rule to hold on to: the rate of dividend is always applied to the face value, never to the market value. So

$Dividend per share = FV \times \frac{rate of dividend}{100}$

and the CISCE formula for the shareholder's annual income is

$Income = number of shares \times rate of dividend \times FV$

(with the rate written as a fraction, $\frac{r}{100}$ ).

Where the market value comes in. The market value decides how many shares a given sum buys:

$Number of shares = \frac{Investment}{MV of one share} .$

A share 'at a premium of 10%' with FV ₹100 costs ₹110; 'at a discount of 20%' costs ₹80; 'at par' costs ₹100. In 2024 Q9(ii), the examiners reported candidates who divided ₹33,000 by ₹100 instead of the premium price ₹110, getting 330 shares instead of 300 and a wrong dividend.

Putting it together. A typical income question runs: market value → number of shares → dividend per share → income. For example, ₹26,000 invested in ₹100 shares at ₹130, paying 9%: $\frac{26000}{130} = 200$ shares; dividend per share $= 9$ ; income $= 200 \times 9 = ₹1, 800$ .

Selling and reinvesting. If shares are sold, the money received is (number of shares) × (selling market price). Reinvested in another company, it buys a new number of shares at that company's market price, and the new income uses that company's face value and dividend rate. Compare the two incomes to find the change.

Brokerage and fractional shares are not in the CISCE syllabus, so the number of shares in a board question always comes out as a whole number.

Dividend and Annual Income from Shares: formulas to remember

Dividend per share: $Dividend per share = FV \times \frac{r}{100}$; $r %$ = rate of dividend; always on face value.
Annual income: $Income = n \times FV \times \frac{r}{100}$; $n$ = number of shares (the CISCE formula).
Number of shares: $n = \frac{Investment}{MV}$; Use the market value actually paid.
Market value at a premium or discount: $MV = FV (1 \pm \frac{p}{100})$; + for a premium of $p %$ , − for a discount.
Shares needed for a target income: $n = \frac{Target income}{Dividend per share}$; Then investment $= n \times MV$ .
Rate of dividend from the income: $r = \frac{Income}{n \times FV} \times 100$; Denominator is the total face value held.

How to solve Dividend and Annual Income from Shares questions

Follow the money: from the investment to the number of shares, and from the face value to the dividend.

1Write FV, MV and the rate of dividend. Convert 'at a premium/discount of p%' into a market value.
2If the investment is given, number of shares = investment ÷ MV.
3Dividend per share = FV × rate ÷ 100.
4Annual income = number of shares × dividend per share.
5For a target income, divide the target by the dividend per share to get the number of shares, then multiply by MV for the investment.
6For selling and reinvesting, find the sale proceeds, the new number of shares and the new income, then compare.
7State the answer with units (shares, ₹).

Dividend and Annual Income from Shares in real life

Each concept, met in an everyday situation. Read the situation, try the problem, then check the solution. The one-line hook is what to remember.

Income from a holding of shares

Suppose your grandmother owns 300 shares of face value ₹10 each, and the company declares a dividend of 25% this year.

How much will she receive as dividend?

Try it first, then show the solutionSolution

Dividend per share $= 10 \times \frac{25}{100} = 2.50$ .
Income $= 300 \times 2.50 = 750$ .

Answer: ₹750.

Memory hook: Dividend reads the face value printed on the share, not today's price.

Buying above face value

Imagine you buy 50 shares of face value ₹100 at ₹160 each with your savings, and the company pays a 12% dividend.

Find your investment, your annual income and the percentage your money earns.

Try it first, then show the solutionSolution

Investment $= 50 \times 160 = 8000$ .
Income $= 50 \times 100 \times \frac{12}{100} = 600$ .
Return $= \frac{600}{8000} \times 100 = 7.5%$ .

Answer: Investment ₹8,000; income ₹600; your money earns 7.5%, less than 12% because you paid a premium.

Memory hook: Pay more than face value and your money earns less than the dividend rate.

Tricks to remember Dividend and Annual Income from Shares

Short memory aids. Say each one aloud once, then use it on a question the same day.

Dividend Faces the Face value
D and F go together: Dividend is on Face value. Market value is for Money spent.
Use it when: Never computing a dividend on market value.
Money ÷ Market = shares
M for Money, M for Market: investment ÷ market value = number of shares.
Use it when: First step of every investment question.
Premium = plus, discount = minus
₹100 share at 10% premium → ₹110; at 20% discount → ₹80; at par → ₹100.
Use it when: Turning words into a market value.
Follow the money
Investment → shares → dividend per share → income. Write each on a new line.
Use it when: Multi-part questions.

Dividend and Annual Income from Shares: solved examples

Ordered from board level to HOTS. Try each one before you open the solution.

Example 1: Income from a number of shares · 1 mark · MCQBoard level

A man holds 200 shares of face value ₹50 each. The company declares a dividend of 8%. His annual income is:
(a) ₹800
(b) ₹400
(c) ₹4,000
(d) ₹1,600

Try it first, then show the solutionSolution

Dividend per share $= 50 \times \frac{8}{100} = 4$ .
Income $= 200 \times 4 = 800$ .

Answer: (a) ₹800

Example 2: Shares bought at a premium · 3 marks · Short answerBoard level

Anil invests ₹26,000 in ₹100 shares of a company at a premium of 30%. The company pays a dividend of 9%. Find (a) the number of shares, (b) his annual income.

Try it first, then show the solutionSolution

MV $= 100 + 30%$ of $100 = 130$ .
(a) Number of shares $= \frac{26000}{130} = 200$ .
(b) Income $= 200 \times 100 \times \frac{9}{100} = 1800$ .

Answer: (a) 200 shares (b) ₹1,800

Example 3: Shares bought at a discount · 3 marks · Short answerHarder board level

Sunita invests ₹12,000 in ₹10 shares available at a discount of 20%. The dividend is 15%. Find (a) the number of shares, (b) her annual income, (c) the percentage return on her investment.

Try it first, then show the solutionSolution

MV $= 10 - 20%$ of $10 = 8$ ; number of shares $= \frac{12000}{8} = 1500$ .
Income $= 1500 \times 10 \times \frac{15}{100} = 2250$ .
Return $= \frac{2250}{12000} \times 100 = 18.75%$ .

Answer: (a) 1,500 shares (b) ₹2,250 (c) 18.75%

Example 4: Shares needed for a target income · 4 marks · Short answerHarder board level

How many ₹25 shares paying a 12% dividend must a woman buy to get an annual income of ₹1,800? If the shares are quoted at ₹40, how much must she invest?

Try it first, then show the solutionSolution

Dividend per share $= 25 \times \frac{12}{100} = 3$ .
Number of shares $= \frac{1800}{3} = 600$ .
Investment $= 600 \times 40 = 24000$ .

Answer: 600 shares; investment ₹24,000.

Example 5: Selling and reinvesting · 4 marks · Short answerHOTS / competency

Mr Rao holds 400 shares of ₹100 each of company A, which pays a 12% dividend. He sells them at ₹150 each and invests the proceeds in ₹50 shares of company B at ₹40 each, which pays a 10% dividend. Find the change in his annual income.

Try it first, then show the solutionSolution

Old income $= 400 \times 100 \times \frac{12}{100} = 4800$ .
Sale proceeds $= 400 \times 150 = 60000$ .
New shares $= \frac{60000}{40} = 1500$ ; new income $= 1500 \times 50 \times \frac{10}{100} = 7500$ .
Change $= 7500 - 4800 = 2700$ (an increase).

Answer: His income increases by ₹2,700 (from ₹4,800 to ₹7,500).

Example 6: Case study: a family's shareholding · 4 marks · Case-basedHOTS / competency

Mrs Fernandes holds 250 shares of face value ₹20 each.
(a) Find her income if the company declares a 12% dividend.
(b) What rate of dividend would give her an income of ₹750?
(c) She had bought the shares at ₹24 each. At the rate in (b), what percentage return does she get on her investment?

Try it first, then show the solutionSolution

(a) Income $= 250 \times 20 \times \frac{12}{100} = 600$ .
(b) Total face value $= 250 \times 20 = 5000$ ; rate $= \frac{750}{5000} \times 100 = 15%$ .
(c) Investment $= 250 \times 24 = 6000$ ; return $= \frac{750}{6000} \times 100 = 12.5%$ .

Answer: (a) ₹600 (b) 15% (c) 12.5%

Where students lose marks in Dividend and Annual Income from Shares

The slips examiners see most often, and what to write instead.

Mistake: Dividing the investment by the face value
Shares are bought at their market value.
Wrong working
₹33,000 in ₹100 shares at 10% premium: $\frac{33000}{100} = 330$ shares.
Right working
MV $= 110$ ; $\frac{33000}{110} = 300$ shares.
Do this: Write 'MV = …' before dividing.
Usually costs: Examiners named this for 2024 Q9(ii); the dividend part was also lost.
Mistake: Calculating the dividend on the market value
The rate of dividend applies to the face value.
Wrong working
Dividend $= 9%$ of $130 = 11.70$ per share.
Right working
Dividend $= 9%$ of $100 = 9$ per share.
Do this: Remember: Dividend Faces the Face value.
Usually costs: The income mark.
Mistake: Giving the price of one share when the total is asked
The question asked for the sum invested for all the shares.
Wrong working
15 shares of ₹75 at 20% discount: answer ₹60.
Right working
$15 \times 60 = ₹900$ .
Do this: Multiply by the number of shares at the end.
Usually costs: The MCQ in 2024 Q1(ix).
Mistake: Using the old company's face value after reinvesting
The new shares have their own face value and rate.
Wrong working
New income $= 1500 \times 100 \times 0.10$ .
Right working
New income $= 1500 \times 50 \times 0.10 = 7500$ .
Do this: Make a two-column table: old company, new company.
Usually costs: The final 2 marks of a 4-mark question.

Exam tips

In 2024 Q9(ii), the expected points were MV ₹110, 300 shares and dividend ₹3,600; the examiners reported candidates who were unfamiliar with the word 'premium'.
In 2024 Q1(ix) the examiners reported candidates who gave the price of one share (₹60) instead of the sum for 15 shares.
Write FV and MV at the top of your answer; it shows you know which value is used where.
Brokerage and fractional shares are not in the syllabus, so a fractional number of shares means a slip.

Practice questions on Dividend and Annual Income from Shares

Write each answer on paper first. Open the hint only if you are stuck, and the answer only when you have finished.

Q1 · 1 mark · MCQBoard level
The dividend on a share is calculated on its:
(a) market value
(b) face value
(c) selling price
(d) premium
Hint
Which value is printed on the share?
Answer
(b) face value.
Q2 · 3 marks · Short answerBoard level
Find the annual income from 350 shares of ₹100 each when the company pays a dividend of 7.5%.
Hint
Dividend per share = ₹7.50.
Answer
$350 \times 100 \times \frac{7.5}{100} = ₹2, 625$ .
Q3 · 3 marks · Short answerHarder board level
Rahul invests ₹45,000 in ₹50 shares at ₹75 each. The dividend is 12%. Find his annual income.
Hint
Number of shares = 45,000 ÷ 75.
Answer
600 shares; income $= 600 \times 50 \times 0.12 = ₹3, 600$ .
Q4 · 1 mark · MCQHarder board level
A man receives ₹1,440 as dividend from 120 shares of face value ₹100 each. The rate of dividend is:
(a) 10%
(b) 12%
(c) 14.4%
(d) 8%
Hint
Total face value = ₹12,000.
Answer
(b) 12%
Q5 · 3 marks · Short answerHarder board level
A company pays an 8% dividend on its ₹25 shares, which Rina bought at ₹20 each. Her annual income is ₹2,000. Find the number of shares and her investment.
Hint
Dividend per share = ₹2.
Answer
Shares $= \frac{2000}{2} = 1000$ ; investment $= 1000 \times 20 = ₹20, 000$ .
Q6 · 3 marks · Short answerHarder board level
When a company raises its dividend from 8% to 10%, a shareholder's income from ₹50 shares rises by ₹500. How many shares does she hold?
Hint
The rise is 2% of the total face value.
Answer
$n \times 50 \times \frac{2}{100} = 500 \Rightarrow n = 500$ shares.
Q7 · 4 marks · Short answerHOTS / competency
A man sells 200 shares of ₹100 (10% dividend) at ₹120 each and invests the money in ₹10 shares at ₹12 each paying 12%. Find (a) the number of new shares, (b) the change in his annual income.
Hint
Old income on face value ₹20,000; new on the new face value.
Answer
(a) Proceeds ₹24,000; $\frac{24000}{12} = 2000$ shares. (b) Old income ₹2,000; new income $2000 \times 10 \times 0.12 = ₹2, 400$ ; an increase of ₹400.

Test your recall

Answer in your head or on paper first, then open the card. Pulling an answer out of memory makes it stick far better than re-reading.

1.Dividend per share on a ₹10 share at 15%?Show answer
₹1.50.
2.Market value of a ₹50 share at 20% premium?Show answer
₹60.
3.₹9,000 invested in shares at ₹90. Number of shares?Show answer
100.
4.100 shares of ₹100 at 6% dividend. Income?Show answer
₹600.
5.Which value decides the number of shares bought, and which decides the dividend?Show answer
Market value decides the number of shares; face value decides the dividend.

Dividend and Annual Income from Shares: frequently asked questions

Is dividend calculated on market value or face value?

Always on face value. The market value only decides how many shares your money buys and therefore the return on your investment.

What does 'shares at a premium' mean?

The market value is above the face value. A ₹100 share at a 10% premium costs ₹110.

What is the formula for annual income from shares?

Income = number of shares × rate of dividend × face value, with the rate written as r/100. This is the formula in the CISCE syllabus.

Is brokerage included in ICSE shares questions?

No. The CISCE 2027 syllabus says brokerage and fractional shares are not included.