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bonus issue of shares

Forums › Ask ACCA Tutor Forums › Ask the Tutor ACCA FM Exams › bonus issue of shares

  • This topic has 3 replies, 2 voices, and was last updated 4 years ago by AvatarJohn Moffat.
Viewing 4 posts - 1 through 4 (of 4 total)
  • Author
    Posts
  • February 5, 2022 at 10:02 am #648145
    Avatarjohnbriane
    Member
    • Topics: 170
    • Replies: 159
    • ☆☆☆

    sir

    basically shares do exist In order to raise finance for a company but there are some shares like the bonus shares
    which do not directly raise finance to a company rather it does makes the companys shares more marketable which will in turn might raise finance to the company in the future .

    am i right in saying this sir ?

    February 5, 2022 at 4:02 pm #648168
    AvatarJohn Moffat
    Keymaster
    • Topics: 57
    • Replies: 54836
    • ☆☆☆☆☆

    You are right except that the end of the last sentence should read “…….more marketable which will make it easier to raise new equity finance in the future.”

    February 5, 2022 at 4:17 pm #648172
    Avatarjohnbriane
    Member
    • Topics: 170
    • Replies: 159
    • ☆☆☆

    sir are there any specific reason as per why the last sentence does need to include the word ‘equity finance ”

    thank you
    regards

    February 5, 2022 at 4:23 pm #648175
    AvatarJohn Moffat
    Keymaster
    • Topics: 57
    • Replies: 54836
    • ☆☆☆☆☆

    Because it doesn’t make it any easier to raise debt finance.

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