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Question
______ shares are issued free of cost to existing equity shareholders.
Options
Bonus
Right
Equity
Solution
Bonus shares are issued free of cost to existing equity shareholders.
Explanation:
Bonus shares are issued as gift to equity shareholders. These shares are issued free of cost to existing equity shareholders. These are issued out of accumulated profits. Bonus shares are issued in proportion to the shares held. Thus capital investment of (ordinary) equity shareholder tends to grow on its own. This benefit is available only to the equity shareholder.
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