The correct answer is option (C):
Rs.60 less
Here's how to solve this problem step-by-step to determine the change in the person's income:
Step 1: Calculate the initial income from dividends.
* Number of shares: 150
* Face value per share: Rs. 25
* Dividend rate: 12%
* Dividend per share: (12/100) * Rs. 25 = Rs. 3
* Total dividend income: 150 shares * Rs. 3/share = Rs. 450
Step 2: Calculate the proceeds from selling the shares.
* Selling price per share: Rs. 40
* Total proceeds: 150 shares * Rs. 40/share = Rs. 6000
Step 3: Calculate the number of shares purchased in the new investment.
* Par value per share of new stock: Rs. 100
* Purchase price per share of new stock: Rs. 80
* Number of shares purchased: Rs. 6000 / Rs. 80/share = 75 shares
Step 4: Calculate the income from the new investment.
* Dividend rate of new stock: 7%
* Dividend per share of new stock: (7/100) * Rs. 100 = Rs. 7
* Total dividend income from new investment: 75 shares * Rs. 7/share = Rs. 525
Step 5: Calculate the change in income.
* Change in income: New income - Old income
* Change in income: Rs. 525 - Rs. 450 = Rs. 75
Therefore, the person's income increased by Rs. 75. However, there seems to be a slight miscalculation in the answer choices. Let's recalculate step by step to ensure accuracy.
Step 1: Calculate initial dividend income
Shares = 150
Face value = Rs. 25
Dividend % = 12%
Dividend per share = (12/100) * 25 = Rs. 3
Total Dividend = 150 * 3 = Rs. 450
Step 2: Calculate proceeds from selling shares
Selling price = Rs. 40
Total proceeds = 150 * 40 = Rs. 6000
Step 3: Calculate the number of new shares purchased
Par value = Rs. 100
Buying price = Rs. 80
Shares purchased = 6000 / 80 = 75
Step 4: Calculate dividend from the new shares
Dividend rate = 7%
Dividend per share = (7/100) * 100 = Rs. 7
Total dividend = 75 * 7 = Rs. 525
Step 5: Change in income
Change in income = New income - old income
Change in income = 525 - 450 = 75
The change in income should be Rs.75 more. However, the answer options do not include this correct answer. Given the multiple-choice options, it's possible there may be a calculation error. Let's analyze the options:
Rs. 50 less - Incorrect
Rs. 70 more - Incorrect
Rs. 60 less - Incorrect
Rs. 75 more - Correct
Cannot be determined - Incorrect
Since the calculations show an increase of Rs. 75, we should choose "Rs. 75 more". However the correct answer in the original post is incorrect. There's a slight error in the provided answer.
The correct answer should be Rs. 75 more.