Difference Between Bonus Issue and Right Issue
Understand the key differences between Bonus Issue and Rights Issue which are one of the two primary methods of companies to motivate shareholders.
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Issuing bonus shares and right shares is a common practice for companies doing financially well to incentivize their shareholders. It not only creates a positive impression of the company in the market but also provides an impetus to the investors to have more stake in the company.
Although both the issues are beneficial for the investors, many times people get confused between the two. In both the issues additional shares are issued but the primary difference between bonus share issue and right shares is of their nature. While bonus shares are the extra shares presented to the shareholders free of cost, the right shares are those additional shares that are provided at a discounted price.
Know in detail about difference between bonus issue and right issue
