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If a company makes bonus issue at 2:3 then it means
  • a)
    For every two shares three bonus shares will be allotted
  • b)
    For every three shares two bonus shares will be allotted
  • c)
    For every Eve shares three bonus shares will be allotted
  • d)
    For every five shares two bonus shares will be allotted
Correct answer is option 'B'. Can you explain this answer?
Most Upvoted Answer
If a company makes bonus issue at 2:3 then it meansa)For every two sha...
Explanation:


  • Company's Bonus Issue: When a company makes a bonus issue at 2:3, it means that for every 2 existing shares, 3 bonus shares will be allotted to the shareholders.

  • Calculation: To calculate the number of bonus shares a shareholder will receive, divide the total number of existing shares by the denominator of the ratio (in this case, 3) and then multiply by the numerator of the ratio (in this case, 2).

  • Example: If a shareholder holds 100 existing shares, they will receive (100/3) * 2 = 66.67 bonus shares, which will be rounded down to the nearest whole number, giving a total of 66 bonus shares.

  • Benefit to Shareholders: Bonus issues are a way for companies to reward their shareholders without impacting the company's cash reserves. Shareholders benefit from receiving additional shares, which can increase their ownership stake in the company.

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If a company makes bonus issue at 2:3 then it meansa)For every two shares three bonus shares will be allottedb)For every three shares two bonus shares will be allottedc)For every Eve shares three bonus shares will be allottedd)For every five shares two bonus shares will be allottedCorrect answer is option 'B'. Can you explain this answer?
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