I was unclear on difference between Dividend & Bonus.
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Hi,
Bonus shares are additional shares given to the current shareholders without any additional cost, based upon the number of shares that a shareholder owns.
Dividends can be issued in various forms, such as cash payment, stocks or any other form. A company’s dividend is decided by its board of directors and it requires the shareholders’ approval. However, it is not obligatory for a company to pay a dividend. The dividend is usually a part of the profit that the company shares with its shareholders.
If a company declares a dividend of Rs 2 per share, then the dividend amount is directly credited to our bank account and when the company declares bonus shares, the the additional bonus shares is credited in to our demat account.
Thanks Naresh for your clarifications.
Hi ,
Face Value: stocks, the face value is the original cost of thestock, as listed on the certificate Dividend: Dividend refers to a reward, cash or otherwise, that a company gives to its shareholders. Dividends can be issued in various forms, such as cash payment, stocks or any other form. A company’s dividend is decided by its board of directors and it requires the shareholders’ approval. However, it is not obligatory for a company to pay dividend. Dividend is usually a part of the profit that the company shares with its shareholders. Bonus and Split: Stock split is the same share divided into two or more shares as per the ratio whereas abonus issue is an additional share which is given to the existing shareholders. In both the actions the fundamentals of the company the same and only reserves capital and face value are affected.