Shareholders who exercise their entitlement to a bonus issue of shares will, in theory:

Question

Quizplus · Accepted Answer

Bonus issues of shares are typically issued from a company's reserves, converting them into share capital. This action does not involve any cash transaction from the shareholders, nor does it inherently change the value of the company. Therefore, the wealth of the shareholders remains unchanged, as they simply own more shares of the same total value in the company.

Shareholders Who Exercise Their Entitlement to a Bonus Issue of Shares