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Dear sir,
1. A newly listed company can issue shares called IPO initially after it is listed on stock exchange.
2. Later after IPO, the company can offer offer new shares by public issue, Public offer for sale by tender, Private Placement and rights issue.
3. Annually, a company can pay cash dividend or it can issue bonus shares, stock splits and scrip dividends.
4. The shareholders will be happy with the bonus shares, stock splits and scrip dividends as they will get some sort of benefit i.e., for stock split and bonus shares, it makes the shares more marketable.Please check if I need any correction.
Thanks,
Mostly correct.
However, annually they can pay a cash dividend or a scrip dividend – that is true.
They will both make the shareholders better off because they either have more cash or they own more shares.Bonus issues and stock splits do not make the shareholders better off in the sense that although they might have (for example) twice as many shares, each share would then only be worth half of what they were before. So they will still be worth the same in total.
They will make the shares more marketable if the share price currently is very high. If it is not currently very high then it won’t actually make much difference.
Also, it is not choice between ‘dividends or scrip dividends’ and ‘bonus issues or stock splits’ – they could pay a dividend and have a bonus issue in the same year.Dear sir,
How the bonus issue makes the new issues of new shares easier?
Thanks,
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