NISM Certifications · NISM-Series-VI: Depository Operations · Special Services - Public Offering / Corporate Actions
A company announces a bonus issue in the ratio of 1:2 (one new share for every two held). A client holds 1,000 shares in demat form on the record date. How many shares will the client hold after the bonus credit?
The client will hold 1,500 shares. A 1:2 bonus gives one new share for every two held, so 1,000 shares earn 500 bonus shares, which are credited to the demat account and added to the existing 1,000 shares.
- A1,200 shares
- B1,500 sharesCorrect
- C2,000 shares
- D1,100 shares
Explanation
A 1:2 bonus means 1 new share for every 2 held. 1,000 / 2 = 500 bonus shares. Total holding = 1,000 + 500 = 1,500. Choosing 2,000 wrongly treats it as a 1:1 bonus, and 1,200 wrongly applies a 1:5 ratio.
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