NISM Certifications · NISM-Series-VI: Depository Operations · Special Services - Public Offering / Corporate Actions
A company announces a bonus issue of 1 share for every 2 held. Mr. Iyer holds 1,000 shares in his demat account on the record date. How many bonus shares will be credited to his account, and what will be his total holding?
Mr. Iyer receives 500 bonus shares, taking his holding to 1,500 shares. A 1:2 bonus gives one new share for every two held, so 1,000 divided by 2 equals 500, which is added to the existing 1,000 shares.
- A500 bonus shares; total 1,500Correct
- B1,000 bonus shares; total 2,000
- C250 bonus shares; total 1,250
- D500 bonus shares; total 1,000
Explanation
Bonus ratio 1:2 means 1 new share per 2 held. 1,000 / 2 = 500 bonus shares. Total holding = 1,000 + 500 = 1,500. Option 1,000 bonus shares would be a 1:1 ratio, which is wrong here.
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