What is the bonus shares ratio and how is it calculated?
The company issues bonus in a certain ratio called the bonus ratio. For example, if the bonus share ratio is 1:5, you will get 1 free share for every 5 shares you hold. If you hold 100 shares on the record date, you will have 120 shares after the 20 bonus shares are credited to your account.
| Bonus ratio | Old face value | Shares held before bonus | Share price before bonus | Investment value before bonus | New Face Value | Shares held after bonus | Share price after bonus | Investment value after bonus |
| 1:1 | 10 | 100 | 500 | 50000 | 10 | 200 | 250 | 50000 |
| 3:1 | 10 | 100 | 500 | 50000 | 10 | 400 | 125 | 50000 |
Note: In a bonus share issue, the investment value and face value will remain the same. However, the number of stocks held increases.
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