Multiple Choice Questions on When bonus share are received the average cost of the existing shares are hellip hellip hellip helli........... for SEBI Grade A ( Officer) Exam Preparation

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Multiple Choice Questions

When bonus share are received the average cost of the existing shares are hellip hellip hellip helli...........

Accountancy (Phase -I & II) Bonus and Right issue
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    When bonus share are received the average cost of the existing shares are ……………………………. 

    Reduced 

    Correct Answer

    Increased 

    Incorrect Answer

    equal 

    Incorrect Answer

    none of these

    Incorrect Answer
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    Explanation:

    In case of a bonus issue, the share price of the company falls in the same proportion as the bonus shares issued. So, in a 1:1 bonus issue, the share price will fall by 50%. Other metrics, such as earnings per share (EPS), will also go down.

    By: SWAPNIL AGGARWAL
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