A bonus issue of shares to existing shareholders has which of the following impacts on the equity of a company?
A) Total equity increases.
B) Total equity decreases.
C) No overall change in total equity.
D) Only the amount of issued share capital changes.

Question

Quizplus · Accepted Answer

A bonus issue of shares to existing shareholders is essentially a reallocation of the company's equity. It converts retained earnings or other reserves into issued share capital, but the total equity of the company remains unchanged because no new funds are brought into the company.

A Bonus Issue of Shares to Existing Shareholders Has Which