stock market
The shareholders of a company are an integral part of a company as they play a major role in the growth and expansion of a company. Therefore, it becomes important for a company to take care of the interests of its shareholders. In order to protect the shareholder’s interests the company rewards them with several corporate actions and two of which are bonus shares and split shares.
Know the Difference Between Bonus and Split
What is a Stock Split?
Stock split means a corporate action where the face value of a share is divided further while the number of shares gets multiplied by the same factor. When the share split of a company takes place, the face value of the share decreases while the market capitalization of the company remains the same resulting in an increase in the number of shares.
What is a Bonus Share?
The stock bonus works on similar lines with the stock split but the face value of the company’s shares remains the same. A stock bonus is seen as a form of stock dividend issuance where the bonus shares are issued to the existing shareholders of the company for free without any tax implications.
