Bonus Issue ► Bonus shares are issued to the existing shareholders (on a pro-rata basis) for free ► In essence, a bonus issue results in the same pie (the existing equity) being cut up into more pieces (shares outstanding), with each shareholder holding the same proportion of the pieces as before the share issue. ► From a shareholder's viewpoint, his or her shareholding remains unchanged except that now the shareholder owns a greater number of shares in the company.

Bonus Issue ► Bonus shares are issued to the existing shareholders (on a pro-rata basis) for free ► In essence, a bonus issue results in the same pie (the existing equity) being cut up into more pieces (shares outstanding), with each shareholder holding the same proportion of the pieces as before the share issue. ► From a shareholder's viewpoint, his or her shareholding remains unchanged except that now the shareholder owns a greater number of shares in the company.

SWFT Corp Partner Estates Trusts

42nd Edition

ISBN:9780357161548

Author:Raabe

Publisher:Raabe

Chapter5: Corporations: Earnings & Profits And Dividend Distributions

Section: Chapter Questions

Problem 14DQ

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4-B
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