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The Deal about Bonus Shares
June 06 , 2012

There is no 'bonus' in a bonus share! Bonus share is when a company decides to offer one or more additional shares free, for every share an investor holds. If it is a 1:1 bonus, it means that you receive one share free for every share you hold. Before you uncork the champagne, please note that this is bit of a joke. Your share price drops to half, so you haven't made a net loss or gain in the process.

Bonus shares are actually non-events, and deserve no investor attention. However, there have been cases where gullible and uninformed investors have made bad decisions based on the buzz around the word 'bonus'.

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