NISM Certifications · NISM-Series-XV: Research Analyst · Corporate Actions
Shares of Sundaram Textiles closed at ₹600 cum-bonus. The company announced a 1:2 bonus issue (one bonus share for every two held). Ignoring any other market effect, what is the theoretical ex-bonus price?
The theoretical ex-bonus price is ₹400. Two shares worth ₹1,200 become three shares after a 1:2 bonus, and since total value stays the same, each share is worth ₹1,200 divided by 3, which equals ₹400.
- A₹300
- B₹400Correct
- C₹450
- D₹600
Explanation
Holding 2 shares worth 1,200 becomes 3 shares after the bonus. The total value is unchanged, so the price per share = 1,200 / 3 = ₹400. ₹300 wrongly divides by 2 as if the bonus doubled the shares; ₹450 wrongly uses a 1:3 ratio.
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