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Is dividend payable on bonus shares?

Avatar 37a3bd7bc7328f0ead2c0f6f635dddf60615e676e6b4ddf964144012e529de45 raaghav asked over 3 years ago

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10 Answers
Avatar 37a3bd7bc7328f0ead2c0f6f635dddf60615e676e6b4ddf964144012e529de45 Anil Dhawan answered almost 3 years ago

Whenever a company announces a bonus issue, it also announces a book closure date which is a date on which the company will ideally temporarily close its books for fresh transfers of stock. An issue of bonus shares is referred to as a bonus issue. Depending upon the constitutional documents of the company, only certain classes of shares may be entitled to bonus issues, or may be entitled to bonus issues in preference to other classes. Bonus shares are distributed in a fixed ratio to the shareholders. Sometimes a company will change the number of shares in issue by capitalizing its reserve. In other words, it can convert the right of the shareholders because each individual will hold the same proportion of the outstanding shares as before. A bonus share issue is not a dividend. Although these shares are "distributed" from a company to its shareholders, this is almost never a "distribution" in the corporate law sense. That is because they represent no economic event – no wealth changes hands. The current shareholders simply receive new shares, for free, and in proportion to their previous share in the company. Therefore, a bonus share issue is very similar to a stock split. The only practical difference is that a bonus issue creates a change in the structure of the company's shareholders' equity (in accounting). Another difference between a bonus issue and a stock split is that while a stock split usually also splits the company's authorized share capital

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Avatar 37a3bd7bc7328f0ead2c0f6f635dddf60615e676e6b4ddf964144012e529de45 Krishna answered over 3 years ago

A bonus share is a free share given to its existing shareholders of the company. Yes ! What you read now is correct, Its a "SHARE". Of course, Dividend will be definitely paid on it, if dividend is declared on that particular class of that share. ThanQ. :)

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Avatar 37a3bd7bc7328f0ead2c0f6f635dddf60615e676e6b4ddf964144012e529de45 shruthi answered over 3 years ago

In case of decision by the company to pay dividend to the shareholders the bonus shares issued are equally eligible for dividend payment.

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Avatar 37a3bd7bc7328f0ead2c0f6f635dddf60615e676e6b4ddf964144012e529de45 Kajol Agarwal answered over 3 years ago

Dividend is declared on a particular class of shares. If bonus shares have been issued for that class of shares, then dividend has to be paid on those shares too,

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Avatar 37a3bd7bc7328f0ead2c0f6f635dddf60615e676e6b4ddf964144012e529de45 Pawankumar answered over 3 years ago

Yes dividend will **`definitely`** payable to Bonus shares.

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Avatar 37a3bd7bc7328f0ead2c0f6f635dddf60615e676e6b4ddf964144012e529de45 rajesh answered over 3 years ago

Dear friend, Dividend is payable on fully paid up share capital of the company which is outstanding as on end of financial year including bonus share irrespective of the thing that bonus is issue out of free reserve. While calculating dividend considered all shares at the end of period for which dividend is to be paid. Have good luck and good day.

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Avatar 37a3bd7bc7328f0ead2c0f6f635dddf60615e676e6b4ddf964144012e529de45 VIVEK answered over 3 years ago

Yes Dividend is payable on bonus share too. Bonus share is just as normal share as original one only. It carry same right as of original shares.For example when person hold any equity shares and company issue any bonus on such equity shares then person holding such original equity share gets entitle to bonus share too at the same time share capital of company increased by such number of bonus shares issued by the company. At the end when company pay dividend on its equity shares, it pays on all Original + Bonus. so the person holding bonus shares automatically got entitle for dividend on bonus shares.

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Avatar 37a3bd7bc7328f0ead2c0f6f635dddf60615e676e6b4ddf964144012e529de45 Nikita Agarwal answered over 3 years ago

ddividend is payable on all shares including bonus shares

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Open uri20170510 32134 11vygtv?1494421734 Sumanta answered over 3 years ago

Dividend is payable on all shares issued by the company including the bonus shares.

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Avatar 37a3bd7bc7328f0ead2c0f6f635dddf60615e676e6b4ddf964144012e529de45 Gunjita Kashyap answered over 3 years ago

**A bonus share is a free share of stock given to current shareholders in a company, based upon the number of shares that the shareholder already owns [1] While the issue of bonus shares increases the total number of shares issued and owned, it does not change the value of the company. Although the total number of issued shares increases, the ratio of number of shares held by each shareholder remains constant.** ---------- Whenever a company announces a bonus issue, it also announces a book closure date which is a date on which the company will ideally temporarily close its books for fresh transfers of stock. An issue of bonus shares is referred to as a bonus issue. Depending upon the constitutional documents of the company, only certain classes of shares may be entitled to bonus issues, or may be entitled to bonus issues in preference to other classes. Bonus shares are distributed in a fixed ratio to the shareholders. Sometimes a company will change the number of shares in issue by capitalizing its reserve. In other words, it can convert the right of the shareholders because each individual will hold the same proportion of the outstanding shares as before. A bonus share issue is not a dividend. Although these shares are "distributed" from a company to its shareholders, this is almost never a "distribution" in the corporate law sense. That is because they represent no economic event – no wealth changes hands. The current shareholders simply receive new shares, for free, and in proportion to their previous share in the company. Therefore, a bonus share issue is very similar to a stock split. The only practical difference is that a bonus issue creates a change in the structure of the company's shareholders' equity (in accounting). Another difference between a bonus issue and a stock split is that while a stock split usually also splits the company's authorized share capital, the distribution of bonus shares only changes its issued share capital (or even only its outstanding shares).

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