NISM Certifications · NISM-Series-VI: Depository Operations · Special Services - Public Offering / Corporate Actions
A company declares 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 is his resulting holding?
Mr. Iyer receives 500 bonus shares, because a 1:2 bonus gives one new share for every two held, and 1,000 divided by 2 is 500. Added to his existing 1,000 shares, his total holding becomes 1,500 shares.
- A500 bonus shares; total holding 1,500Correct
- B1,000 bonus shares; total holding 2,000
- C500 bonus shares; total holding 500
- D2,000 bonus shares; total holding 3,000
Explanation
Ratio of 1:2 means 1 bonus share per 2 held. 1,000 / 2 = 500 bonus shares. Total = 1,000 + 500 = 1,500. Option 2 wrongly applies 1:1, and option 3 forgets to add the existing holding.
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