stock market is a market whiher the buyers and sellers meet
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Hi,
In response to your question
Your query 1:: what is split
Stock splits are mainly carried out with the intention of increasing liquidity. Once liquidity increases, more buyers and sellers trade in the stock. The split does not affect the value of your holdings even and it doesn’t affect the share’s intrinsic value. Only the advantage is When a share’s price runs up too high, smaller investors find it difficult to buy it. To make it attractive for such people, the company carries out the split, which brings down the share price. So, some investors may be unwilling to pay Rs 1,000 for a certain stock, they may be more inclined to buy it at Rs 250, following a 4:1 split.
Your query 2 :: need of giving bonus
Companies issue bonus shares to encourage retail participation and increase their equity base. Actually it increase in the number of shares & reduces the price per share. But the overall capital remains the same even if bonus shares are declared.