1: A right issue will result in the capitalisation of reserves.
2: A bonus issue increase capital without diluting the current shareholder's holdings.
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To sentence about Right Issue and Bonus issue that it is true or false ?
10y ago#1Both statements are wrong.
Have you watched my free lectures on this?
Yes I watched but still I m confused in it please i need little bit explanation ....
10y ago#3You should have asked for explanation in your first post! :-)
A rights issue does not use reserves - it involved issuing new shares for cash.
A bonus issue does not affect the total capital (share capital plus reserves) at all, because no cash is raised - the shares are issued free of charge.
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