Okuzeka
Investing & the Stock Market vocabulary · Dividends & Corporate Actions

Bonus issue

Meaning in investing & the stock market, with examples

/ˈboʊnəs ˌɪʃuː/nounCommon term

In investing & the stock market, bonus issue means: An issue of new shares given free to existing shareholders in proportion to their holdings, usually by turning reserves or retained profits into share capital.

In Turkish: bedelsiz sermaye artırımı, bedelsiz pay dağıtımı, bedelsiz

How it is used

British and international term; in the US it is closer to a 'stock dividend'. The company's value does not change, so the share price is adjusted down on the effective date. Bonus issues are very popular news in the Turkish market, where they are often expected to attract investors.

Example sentences

  1. The company announced a 100 percent bonus issue, giving one new share for every share held.

  2. After the bonus issue, the share price was adjusted from 60 lira to 30 lira.

Common collocations

  • announce a bonus issue
  • bonus shares
  • bonus issue ratio
  • scrip issue
  • rights issueA way for a listed company to raise new money by offering existing shareholders the right to buy additional shares, usually at a discount and in proportion to what they already own.
  • stock splitA company's decision to divide each existing share into several new shares. The share price falls in the same proportion, so the total value does not change.
  • dividendA part of a company's profit that it pays to its shareholders, usually in cash and usually a fixed amount for each share.
  • shareholderA person or organisation that owns one or more shares in a company and therefore owns part of it, with rights such as voting and receiving dividends.

More terms: Dividends & Corporate Actions

Practise with graded reading

Reading at the right level is the fastest way to make new words stick. Pick free English books by level:

This page explains English vocabulary for learners. It is not financial advice.