12500 shares, of par value Rs. 20 each, are purchased from Ram by Mohan at a price of Rs. 25 each. If Mohan further sells the shares at a premium of Rs. 11 each, find his gain in the transaction.
Rs. 75000
Rs. 70000
Rs. 85000
Rs. 65000
Explanation:
Face value of each share = Rs.20
Market value of each share = Rs.25
Number of shares = 12500
Amount required to purchase the shares = 12500 × 25 = 312500
Mohan further sells the shares at a premium of Rs. 11 each
ie, Mohan further sells the shares at Rs.(20+11) = Rs.31 per share
Total amount he gets by selling all the shares = 12500 × 31 = 387500
His gain = 387500 - 312500 = Rs.75000