Bonus issues

Bonus issues
This is a misnomer: there is no bonus! A better term is scrip issues (or capitalisation issues) and it is where existing shares are subdivided into, say, two new shares, thus doubling the number of shares and halving their value.

A bonus issues is also sometimes known as a scrip issue
Calculating Bonus Issue.

Only if a company has accumulated a surplus in free reserves (retained profits) it can issue bonus shares. As bonus issues add to the number of total shares of the company, the Earnings Per Share ratio decreases.

See also: Capitalist, Saving, Personal finance, Career, Debt consolidation