Bonus Shares Meaning in Stock Market

Investing in stocks offers multiple ways to earn returns, and one of these is through bonus shares. Companies sometimes issue  additional  shares to existing shareholders for free, based on the number of shares they already hold. In this article, we explain what bonus shares are, their benefits, and why they are important for investors.   What Are Bonus Shares?   Bonus shares  are free  additional  shares issued to existing shareholders by a company. They are distributed in a specific ratio, such as 1:2 or 1:5, which  indicates  how many new shares an investor will receive for their existing shares. For example, a 1:2 bonus issue means you get 1  additional  share for every 2 shares you already own.   Companies issue bonus shares by converting reserves or profits into share capital, without any  additional  cost to the shareholder. It increases the total number of shares while proportionally reducing the stock’s price...