Distinguish between bonus shares and right-shares. – InterviewSolution

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1.

Distinguish between bonus shares and right-shares.

Answer»

Bonus Shares	Right Shares
1. Bonus shares are issued free of cost to the existing shareholders in proportion to their holdings.	1. These shares are issued at a price.
2. These shares are fully paid.	2. These shares may be partly paid also.
3. Bonus issues are generally issued by profit-making companies by capitalizing the free reserves.	3. These are issued at a price. The price offered are usually discounted from the trading price, that is the benefit to existing shareholders.
4. A shareholder cannot renounce the offer.	4. A shareholder may renounce all or a part of the offer.

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