Bonus Issue

AAA

DEFINITION of '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".

INVESTOPEDIA EXPLAINS 'Bonus Issue'

New shares are issued to shareholders in proportion to their holdings. For example, the company may give one bonus share for every five shares held.


RELATED TERMS
  1. Dividend

    A distribution of a portion of a company's earnings, decided ...
  2. Shareholder

    Any person, company or other institution that owns at least one ...
  3. Halted Issue

    A planned security offering that does not go forward as planned. ...
  4. Hot Issue

    An issue that sells at a premium over the public offering price ...
  5. Bonus

    1. Additional compensation given to an employee above his/her ...
  6. Issue

    1. The process of offering securities as an attempt to raise ...
RELATED FAQS
  1. Why should investors research the C-suite executives of a company?

    C-suite executives are essential for creating and enacting overall firm strategy and are therefore an important aspect of ... Read Full Answer >>
  2. How does the always be closing (ABC) strategy benefit a salesperson's sales funnel?

    It is good practice in sales to always be closing, because it's common for a salesperson's sales funnel to be leaky. When ... Read Full Answer >>
  3. How reliable or accurate is marginal analysis?

    Marginal analysis is designed to show how economic reasoning allows actors to accomplish more by understanding limits on ... Read Full Answer >>
  4. What is the difference between a principle agent problem and moral hazard?

    Principal-agent problems and moral hazards are related in that one gives rise to the other. Principal-agent problems occur ... Read Full Answer >>
  5. How does agency theory propose to deal with the agency problem?

    Agency theory highlights potential problems that may occur when agents and principals have different interests. Principals ... Read Full Answer >>
  6. What are some ways employers can reduce employee turn over?

    Employers can reduce employee turnover through the use of certain hiring practices, management methods, compensation, benefits ... Read Full Answer >>
Related Articles
  1. Investing Basics

    How And Why Do Companies Pay Dividends?

    If a company decides to pay dividends, it will choose one of three approaches: residual, stability or hybrid policies. Which a company chooses can determine how profitable its dividend payments ...
  2. Bonds & Fixed Income

    What Are Corporate Actions?

    Be a savvy investor - learn how corporate actions affect you as a shareholder.
  3. Entrepreneurship

    Get the Best Freelance Rates for Your Work

    Smart strategies for estimating costs, researching fees, pricing projects and getting your rate for a range of clients.
  4. Investing

    What are Preference Shares?

    Preference shares, also referred to as preferred shares, are equity shares that give the shareholders certain rights ahead of common shareholders. For instance, when the corporation declares ...
  5. Retirement

    Pages From The Bad CEO Playbook

    Excess compensation, golden parachutes, tunneling and IPO spinning make these bad executives even worse.
  6. Retirement

    5 Lesser-Known Retirement And Benefit Plans

    These plans aren't widely used, but they fill a specific niche for employees in certain situations.
  7. Insurance

    Trending Toward Asset-Based Management

    Will charging fees instead of commission increase your client base?
  8. Investing Basics

    Beware Of Company Stock In Qualified Plans

    While this strategy does have a few advantages, it can also pose some substantial risks to employees.
  9. Retirement

    Job Hunting: Higher Pay Vs. Better Benefits

    Focusing on salary may be a mistake. Find out which benefits have the highest long-run payoff.
  10. Personal Finance

    America's Compensation Gap Shows No Signs Of Slowing

    The gap between the rich and the poor and middle classes is rapidly increasing in America. Historically this is not a good sign, as a strong middle class has been the backbone of the U.S. economy ...

You May Also Like

Hot Definitions
  1. Butterfly Spread

    A neutral option strategy combining bull and bear spreads. Butterfly spreads use four option contracts with the same expiration ...
  2. Unlevered Beta

    A type of metric that compares the risk of an unlevered company to the risk of the market. The unlevered beta is the beta ...
  3. Moving Average - MA

    A widely used indicator in technical analysis that helps smooth out price action by filtering out the “noise” from random ...
  4. Yield Curve

    A line that plots the interest rates, at a set point in time, of bonds having equal credit quality, but differing maturity ...
  5. Productivity

    An economic measure of output per unit of input. Inputs include labor and capital, while output is typically measured in ...
  6. Variance

    The spread between numbers in a data set, measuring Variance is calculated by taking the differences between each number ...
Trading Center