Mathematics I Chapter 4 Financial Planning
Jenab Bohari
4. Financial Planning:
Important terms and formulae
1. Rate of CGST = Rate of SGST = ½ X Rate of GST
2. GST payable = Output tax – ITC
Where, ITC= Input Tax Credit
3. Amount required to start a company is called Capital
4. Share: A share is the smallest unit of the capital
5. A person who owns the share is called a share holder.
6. Stock exchange or share market or stock market or equity market or capital market:
It is a place where buying and selling of shares take place.
7. Face Value (FV): The value printed on the share certificate is called the Face value
of the share
8. Market Value (MV): The price at which the shares are sold or purchased in the stock
market is called Market value (MV) of the share.
9.Dividend The part of annual profit of a company which is distributed per share
among shareholders is called dividend.
10. a) If MV > FV then the share is at premium.
b) If MV = FV then the share is at par.
c) If MV < FV then the share is at discount.
11. Market Value (MV) = 𝑻𝒐𝒕𝒂𝒍 𝑰𝒏𝒗𝒆𝒔𝒕𝒎𝒆𝒏𝒕 / Number of shares
12 Market Value (MV) = FV + Premium
13. Sum Investment = MV X Number of Shares
14. Dividend per share = FV x % of Dividend /100
15. Total Dividend Received = Number of shares x Dividend per share
16. Rate of Return = Dividend Income / Sum Invested X 100.
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Mathematics I Chapter 4 Financial Planning
Jenab Bohari
17. Brokerage: We directly can't go to the stod 7 market and buy or sell shares, only the
registered members or organization (agency) of the stock market can buy or sell on our
behalf. These members are called 'Share Brokers'.
For catering the service of buying and selling of shares they charge some amount
which is called 'Brokerage' Brokerage is paid on the Market value of the share.
18. Buying price of 1 share = MV + Brokerage Selling
19. price per share = MV - Brokerage
20. Brokerage is always calculated on Mark value of shares.
21.In the contract note of sale-purchase of shares, price of one share is shown with
brokerage and taxes.
22.Rate of GST is 18% on brokerage
23. Total fund value = NAV of one unit x Number of units.
24. At the time of Buying shares :
Buying price of 1 share = MV+ Brokerage +GST on Brokerage
25. At the time of selling shares:
Selling price of 1 shave = MV – Brokerage – GST on Brokerage
26. Brokerage per share = Rate of Brokerage X MV
27. Total Brokerage = No. of shares X Brokerage per share.
28. GST on Brokerage = Rate of GST on Brokerage X Total Brokerage.
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