Question

A public limited company proposes to increase its subscribed capital by offering new shares to its existing shareholders free of charge by capitalising its accumulated profits. Such an issue is termed as ______.

पर्याय

• ESOP (Employees Stock Option Plan)

• Private Placement of Shares

• Rights Issue

• Issue of Bonus shares

Answer 1

A public limited company proposes to increase its subscribed capital by offering new shares to its existing shareholders free of charge by capitalising its accumulated profits. Such an issue is termed as Issue of Bonus shares.

Explanation:

• Bonus shares are issued to existing shareholders, free of charge, by capitalising the company’s accumulated profits or reserves.
• This helps distribute the company’s profits among shareholders without affecting its cash reserves.