What is the source of the issue of bonus shares?

Question

Accepted Answer

Bonus shares are issued by companies to reward shareholders by giving them additional shares at no cost.

Bonus shares are issued from the company's reserves or profits.
They are given to existing shareholders in proportion to their current holdings.
Bonus shares do not increase the value of the company, but they do increase the number of shares outstanding.
The purpose of issuing bonus shares is to increase liquidity and make the shares more affordable for small investors.
Bonus shares are also seen as a sign of confidence in the company's future prospects.
Example: If a company issues a 1:1 bonus share, a shareholder who owns 100 shares will receive an additional 100 shares for free.
Example: If a company issues a 2:1 bonus share, a shareholder who owns 100 shares will receive an additional 200 shares for free.

Accepted Answer

A bonus issue of shares is stock issued by a company in lieu of cash dividend.

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