A bonus share issue from a reserve:

Question

Quizplus · Accepted Answer

A bonus share issue from a reserve does not involve any cash inflow or outflow. Instead, it involves transferring funds from the company's reserve to issue new shares to existing shareholders. This increases the number of shares on issue, but the total equity remains the same, therefore not affecting assets or equity. As there is no change to the company's financial position, the debt-to-equity ratio remains the same. The market price per share may adjust due to changes in supply and demand, but this is not a direct result of the bonus share issue from a reserve.

A Bonus Share Issue from a Reserve