Stocks and shares — combined dividends: Sunil holds 200 preferred shares and 1000 common (ordinary) shares, each with a par value of $100. The company declares a dividend of 10% per annum on preferred shares and 12 1/2% per annum on common shares. Calculate the total annual dividend income received by Sunil from both types of shares.

Introduction / Context:
This problem tests understanding of dividends on preferred and common shares using their declared rates and par values. Dividend income is typically computed on the nominal (par) value, not on the market price, unless otherwise stated. We must add the income from both categories to get the total annual dividend for the shareholder.

Given Data / Assumptions:

• Preferred shares held = 200; dividend rate on preferred = 10% per annum.
• Common shares held = 1000; dividend rate on common = 12 1/2% per annum (i.e., 12.5%).
• Par (face) value of each share = $100.
• Dividend is calculated on par value and paid annually.

Concept / Approach:
Annual dividend on a block of shares = (number of shares) * (par value per share) * (dividend rate). Compute separately for preferred and common shares and then add the two results to obtain the total annual dividend income.

Step-by-Step Solution:

Verification / Alternative check:
Rates are per annum and applied on par values. No compounding or partial-year adjustments are mentioned, so a direct multiplication and summation is appropriate.

Why Other Options Are Wrong:
$550, $3500, and $4000 ignore the correct scale (number of shares * par value). $12,500 is only the common-share portion, missing the preferred dividend.

Common Pitfalls:
Confusing dividend rate with yield (market-based) or mistakenly applying the rate to market price instead of par; forgetting to add both preferred and common incomes.

Final Answer:
$ 14500