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Hi,
In your lecture on CGT: Individuals Shares Example 1 and 2 you mentioned that bonus issues are made by companies in order to rearrange the capital section of their balance sheet.
Can you explain this to me as I am intrigued to understand this, it does seem ridiculous that they are issuing shares for free… 🙂
This is a financial reporting question but do not think that the shareholder is better off as a result – he just has more shares but their total value will be the same as it was before the bonus issue as the market price of each share will be revised down.
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