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Which factor determines the increase in paid-up capital when bonus shares are issued?
  • a)
    The company's current market capitalization.
  • b)
    The number of existing shareholders.
  • c)
    The company's profits and reserves.
  • d)
    The voting rights of shareholders.
Correct answer is option 'C'. Can you explain this answer?
Most Upvoted Answer
Which factor determines the increase in paid-up capital when bonus sha...
The increase in paid-up capital when bonus shares are issued is determined by the company's profits and reserves. Bonus shares are issued by capitalizing a portion of the company's accumulated profits and reserves, which are then converted into additional shares. This process results in an increase in the company's paid-up capital without any monetary transaction.
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Which factor determines the increase in paid-up capital when bonus shares are issued?a)The company's current market capitalization.b)The number of existing shareholders.c)The company's profits and reserves.d)The voting rights of shareholders.Correct answer is option 'C'. Can you explain this answer?
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