bonus issue

bonus issue
Also known as a scrip issue, a capitalisation issue, a free issue or a gratis issue. It is the issue of new fully paid shares in a company to existing shareholders for free on a basis pro rata to existing holdings. For example, a 1 for 4 bonus issue would mean that a shareholder would receive one free share for every four existing shares they own in the company. The impact of a bonus issue is to reduce the share price, since the same total market capitalisation is being spread over a larger number of shares. This may have a beneficial impact in terms of liquidity of trading. Dresdner Kleinwort Wasserstein financial glossary
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(Also scrip issue / capitalisation issue) Euroclear Clearing and Settlement glossary
Security holders are awarded additional assets free of payment from the issuer in proportion to their holding. A bonus issue is typically represented by shares, rights or warrants. Nominal value does not change. Holders may be offered choice of form. Euroclear Clearing and Settlement glossary
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See capitalisation issue Exchange Handbook Glossary
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A free issue of extra shares to shareholders by a company. This is often done when the share price has risen so high that they become too expensive to buy for the smaller investors. This is also known as a 'scrip' or 'capitalisation' issue. Financial Services Glossary
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The issue by a company of new shares which do not require any payment to be made by the shareholder. This has the effect of making the company's shares more marketable because of the increased number available and the lower market price. London Stock Exchange Glossary

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bonus issue bonus issue issue2

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   When a company transfers money from its reserves to its permanent capital it makes a free issue of shares to shareholders. These new shares are then distributed to the existing holders in proportion to their existing holdings. Also known as capitalization issue, a free issue and a scrip issue.

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bonus issue UK US noun [C] FINANCE, STOCK MARKET
an occasion when a company changes its profits into shares and gives these shares to shareholders. Those people then own more shares but each share is worth less than before and therefore can be bought and sold more easily: »

Investors approved a four-for-one bonus issue.

Compare CAPITALIZATION ISSUE(Cf. ↑capitalization issue), SCRIP ISSUE(Cf. ↑scrip issue)

Financial and business terms. 2012.

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Look at other dictionaries:

  • bonus issue — Also known as a scrip issue or capitalisation issue. An issue of new shares to existing shareholders in the same proportions as their existing holdings. Although the shareholders do not pay for the new shares they are not receiving something for… …   Law dictionary

  • bonus issue — noun An issue of additional shares (bonus shares) to a company s shareholders in proportion to their existing shareholding, representing a capitalization of reserves • • • Main Entry: ↑bonus …   Useful english dictionary

  • bonus issue — (Also scrip issue / capitalisation issue) Security holders are awarded additional assets free of payment from the issuer in proportion to their holding. A bonus issue is typically represented by shares, rights or warrants. Nominal value does not… …   Euroclear glossary

  • Bonus Issue — An offer of free additional shares to existing shareholders. A company may decide to distribute further shares as an alternative to increasing the dividend payout. Also known as a scrip issue or capitalization issue . New shares are issued to… …   Investment dictionary

  • bonus issue — /ˈboʊnəs ɪʃu/ (say bohnuhs ishooh) noun a free issue of shares to shareholders of a company; scrip issue. Also, bonus …  

  • bonus issue — /ˌbəυnəs ɪʃu:/ noun a scrip issue or capitalisation issue, where a company transfers money from reserves to share capital and issues free extra shares to the shareholders (the value of the company remains the same, and the total market value of… …   Dictionary of banking and finance

  • bonus issue — noun Brit. an issue of additional shares to shareholders instead of a dividend …   English new terms dictionary

  • bonus issue — See: scrip issue …   Accounting dictionary

  • bonus shares — bonus issue Shares issued to the existing shareholders of a company following a scrip issue The number of shares received depends on the level of the shareholding prior to the bonus issue. The number of bonus shares is usually one share for a… …   Big dictionary of business and management

  • Issue — A particular financial asset. The New York Times Financial Glossary * * * ▪ I. issue is‧sue 1 [ˈɪʆuː, ˈɪsjuː ǁ ˈɪʆuː] verb [transitive] 1. to officially give something such as a document to someone who needs or wants it: issue somebody with… …   Financial and business terms

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