Which of the following is NOT true with respect to bonus shares? They:
A) increase net assets.
B) have no effect on cash balances.
C) give directors the opportunity to signal future dividend policy to current and future shareholders.
D) total shareholders' equity increases.

Question

Quizplus · Accepted Answer

Bonus shares do not increase net assets; they are issued by capitalizing reserves, which means they redistribute existing equity without increasing the company's net assets.

Which of the Following Is NOT True with Respect to Bonus