Answer for Bonus issue

Hi Siew Lee,

Yes, the number of outstanding shares will increase through new issues. The number of outstanding shares will also increase if treasury stocks are taken out and resold to the open market. Also, it doesn’t matter whether it’s taken from treasury or increase in new shares issued. The number of shares outstanding increases by the bonus issue, and while the value of the company remains the same (less some minor expenses), the value of each share is reduced proportionately.

About The Author

Peter Lim

Investor (Not Speculator).