Hi Murthy
I had read your earlier post on bonus issues. You had explained only for 1:1 bonus issue, where Ami split ratio is 1:2. But how to calculate ami split ratio for different bonus issues like 1:2, 3:5 etc.
I went thru' your CorpActions.txt file, which you have calculated for all bonus issues. Thanks for that.
Is formula for ami split ratio for bonus issue is (1 + 'bonus issue ratio').
Sorry if am asking same question repeatedly, as I have little knowledge about corporate financials.
Bye
Raj
hi raj,
i will an elaborate explaination, which probably, you may not need.
in India, minimum lot of shares possible is ONE. fractional shares are not there. so, before any face value split or bonus issue, they have to be in round numbers and also after.
the geneal practice in India is to express the bonus issue in the form of a ratio. (example= L:M). it means that for every 'M' number of shares HELD before the bonus issue, L additional shares are issued, making the total to L+M.
but the practice in the international market is different. as indian market now-a days attracts lot of foreeign investments, bonus announcements are generally expressed as the conventional ratio as well as explained in clear text.
Amobroker accepts only splits and the bonus adjustments can also be inputted using the same window. AB insiats that the ratio (split as well as bonus) be expressed as a ratio in the format (example = N:1). this means ONE share held before the split (also bonus) becomes N new shares after. AB accepts decimal values of N also.
so, a bonus issue of 1:1 ( ONE additional share for every ONE share held prior to bonus, making the total to TWO, is expressed in AB terminology as 2:1, meaning that TWO new shares are made out of every ONE share held earlier. i repeat, the second term in the ratio is always ONE and decimal values are permitted in the first term.
1:1 is shown in AB as 2 new : 1 old -> i.e., 2 : 1
1:2 is shown in AB as 3 new : 2 old -> i.e., 1.5 : 1
3:5 is shown in AB as 8 new to 5 old -> i.e., 1.6 : 1
1:4 is shown in AB as 5 new to 4 old -> i.e., ............
2:5 is shown as ......................
Is formula for ami split ratio for bonus issue is (1 + 'bonus issue ratio').
yes, you are right, but how many will understand the above formulae?
anyway, hope you are clear now.
all the best.
murthymsr