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Question
Explain the following term/concept.
Bonus shares
Solution
(a) Bonus issues refers to the fully paid up shares given to its existing equity shareholders without any cost, based upon the number of shares they own.
(b) Usually, financially sound companies issue bonus shares out of its accumulated distributable profits or reserves. Hence, as the profits or reserves are capitalised, it is also called as ‘Capitalisation of Profits or Reserves’.
RELATED QUESTIONS
Multiple Choice Question:
The term 'redeemable' is used for
What preferential rights are enjoyed by preference shareholders? Explain.
Match the pairs.
| Group 'A' |
Group 'B' |
|
a) Issued capital |
1) Non-payment of calls |
|
b) FPO |
2) Any issue after IPO |
|
c) Bonus shares |
3) Offered to existing employees |
|
d) Issued within two months of allotment of shares |
4) Capital offered to public to subscribe |
|
e) Forfeiture of shares |
5) Share certificate |
|
6) First time issue of shares |
|
|
7) Free shares issued to existing equity shareholders |
|
|
8) Maximum capital a company can raise |
|
|
9) Allotment Letter |
|
|
10) Operation of law |
Write a word or a term or a phrase which can substitute the following statement.
Capital collected by way of issue of Equity and Preference shares.
Write a word or a term or a phrase which can substitute the following statement.
Part of issued capital subscribed by investors.
Find the odd one.
Find the odd one.
Find the odd one.
Select the correct option from the bracket.
(First time offer of shares, Shares offered to public, Shares offered to existing Equity shareholders, Shares offered to existing employees, Transmission of shares)
|
Group 'A' |
Group "B" |
|
a) Public offer of shares |
1) ____________ |
|
b) ____________ |
2) Initial Public offer |
|
c) Rights Issue |
3) ____________ |
|
d) ____________ |
4) ESOS |
|
e) Operation of law |
5) ____________ |
Complete the sentence.
Shares issued free of cost to existing Equity shareholders is called as ______
Answer in one sentence.
With whom should the prospectus be filed before issuing it to the public?
Justify the following statement.
Company has to fulfill certain provisions while making Right Issue.
Justify the following statement.
To Issue Bonus Shares, a company has to fulfill certain provisions.
Justify the following statement.
ESOS is offered by a company to its permanent employees, Directors and Officers
Match the pairs.
| Group A | Group B |
| a) Debenture holders | 1) Secured deposits |
| b) IPO | 2) Owners |
| c) Charge on assets | 3) Any issue after first-time public offer |
| d) SEBI | 4) To protect the interest of investors in securities market |
| e) Issued within two months of allotment of shares | 5) First-time public offer |
| 6) Allotment letter | |
| 7) To protect the interest of companies in securities market | |
| 8) Share certificate | |
| 9) Creditors | |
| 10) Unsecured deposits |
