- A bonus issue is when existing shareholders get extra shares in a certain proportion.
- Bonus shares are usually issued for free to shareholders. A company may decide to issue bonus shares instead of giving dividend in cash.
- In a bonus issue, the number of shares increases, but the value of the investment remains the same.
FOR EXAMPLE: - - If an Investor A , holds 100 shares of a company and a company declares 2:1 bonus (that is for every one share he will get 2 shares), A will get 200 shares for free and his total holding will increase to 300 shares.
RELATED FACTS: - - Shares must be purchased before the ex-date to be eligible for a bonus.
- The bonus quantity is displayed only after they are credited.
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