Question

Karma invests Nu 125,000 in T-Bank shares with a face value of Nu 100 but they are being sold at a premium of 25%. How many shares can he buy?​

Answer 1

The market price of T-Bank shares is 25% higher than the face value, which means that each share is being sold at a price of:

100 + 25% of 100 = 100 + 25 = Nu 125

Karma has Nu 125,000 to invest, so he can buy:

Number of shares = Total investment amount / Price per share

Number of shares = 125000 / 125

Number of shares = 1000

Therefore, Karma can buy 1000 shares of T-Bank with his investment of Nu 125,000 at a premium of 25%.