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What is the primary purpose of issuing bonus shares by a company?
  • a)
    To increase the market price of the company's shares.
  • b)
    To provide immediate cash to shareholders.
  • c)
    To reward shareholders without affecting the company's liquidity.
  • d)
    To decrease the company's goodwill in the capital market.
Correct answer is option 'C'. Can you explain this answer?
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What is the primary purpose of issuing bonus shares by a company?a)To ...
The primary purpose of issuing bonus shares by a company is to reward shareholders without affecting the company's liquidity. Bonus shares are issued by capitalizing a part of the company's profits and reserves, which are distributed among existing shareholders free of cost. This allows shareholders to benefit from the company's success without receiving cash dividends, and it helps in retaining capital within the company for future growth and investments.
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What is the primary purpose of issuing bonus shares by a company?a)To increase the market price of the company's shares.b)To provide immediate cash to shareholders.c)To reward shareholders without affecting the company's liquidity.d)To decrease the company's goodwill in the capital market.Correct answer is option 'C'. Can you explain this answer?
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What is the primary purpose of issuing bonus shares by a company?a)To increase the market price of the company's shares.b)To provide immediate cash to shareholders.c)To reward shareholders without affecting the company's liquidity.d)To decrease the company's goodwill in the capital market.Correct answer is option 'C'. Can you explain this answer? for B Com 2024 is part of B Com preparation. The Question and answers have been prepared according to the B Com exam syllabus. Information about What is the primary purpose of issuing bonus shares by a company?a)To increase the market price of the company's shares.b)To provide immediate cash to shareholders.c)To reward shareholders without affecting the company's liquidity.d)To decrease the company's goodwill in the capital market.Correct answer is option 'C'. Can you explain this answer? covers all topics & solutions for B Com 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for What is the primary purpose of issuing bonus shares by a company?a)To increase the market price of the company's shares.b)To provide immediate cash to shareholders.c)To reward shareholders without affecting the company's liquidity.d)To decrease the company's goodwill in the capital market.Correct answer is option 'C'. Can you explain this answer?.
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