bonus share and stocks split

#15
Actually, in the above explanations, a fundamental difference has been missed out between stock-split and bonus.
In the case of a bonus, there is a significant difference in the company's financial parameters. Its equity increases in the ratio of bonus. For e.g. if a companby issues 1:1 bonus, its equity will double. What this also implies is that the company should be strong enough to generate enough proits to service the increase in equity. Else, its EPS will never come to the pre-bonus proportion and PE will be affected significantly.
 

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