The typical reason for a bonus issue is to
A)allow for growth in the company assets.
B)allow liabilities to grow.
C)increase the affordability of the shares to potential new shareholders.
D)increase earnings per share.

Question

Quizplus · Accepted Answer

A bonus issue increases the number of shares outstanding without changing the total value of the company, making the shares more affordable to potential new shareholders. This usually results in an increase in trading activity and liquidity in the market. Bonus issues do not directly affect the company's assets, liabilities or earnings per share.

The Typical Reason for a Bonus Issue Is to