Explain the following term/concept.1. Capitalisation of Reserve2. Bonu

1.	Explain the following term/concept.1. Capitalisation of Reserve2. Bonus Shares3. Dividend Warrant
Answer» 1. Capitalisation of reserves is the use of corporate reserves to pay a bonus to the shareholders in the form of additional shares. It is distributed to equity shareholders in pre-determined ratio. 2. Bonus shares are fully paid up shares given by a company as a gift out of its accumulated profits or reserves to the existing equity share holders in proportion of shares held by them. It is given free of cost and also known as capitalization of reserves. 3. Dividend warrant is written order given by the company to its banker to pay amount mentioned in it to the shareholder whose name is specified therein. Dividend can be paid through Dividend warrant or by means of electronic mode ECS or NEFT etc. to those shareholders who are registered members i.e their names appear in the Register of members.

Explain the following term/concept.1. Capitalisation of Reserve2. Bonus Shares3. Dividend Warrant

Answer»

1. Capitalisation of reserves is the use of corporate reserves to pay a bonus to the shareholders in the form of additional shares. It is distributed to equity shareholders in pre-determined ratio.

2. Bonus shares are fully paid up shares given by a company as a gift out of its accumulated profits or reserves to the existing equity share holders in proportion of shares held by them. It is given free of cost and also known as capitalization of reserves.

3. Dividend warrant is written order given by the company to its banker to pay amount mentioned in it to the shareholder whose name is specified therein. Dividend can be paid through Dividend warrant or by means of electronic mode ECS or NEFT etc. to those shareholders who are registered members i.e their names appear in the Register of members.

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