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Share Market Terms , Definition and Meaning - Alphabetical LISTING - A, B, C, D, E, F, G, H, I, J, K, L, M, N, O, P, Q, R, S, T, U, V, W, Y, Z
Bonus Issue When a company’s FREE RESERVES are high, it may choose to capitalize part of it by issuing bonus shares to existing shareholders in proportion to their holdings, to convert the reserves into equity. Bonus shares are issued free of cost, but since the number of shareholders remains the same and their proportionate holdings do not change, bonus shares do not improve the shareholders’ ownership of he company. After an issue of bonus shares the price of a company’s share drops, more or less in proportion to the issue. However, since the dividend rate is often maintained, the shareholders gets a larger yield on the increased holding and when the share price APPRECIATES, he makes further gains.
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Share Market Terms , Definition and Meaning - Alphabetical LISTING - A, B, C, D, E, F, G, H, I, J, K, L, M, N, O, P, Q, R, S, T, U, V, W, Y, Z
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