Understanding Stock Splits & Bonus Issues

Stock Split: A company divides its existing shares into multiple shares to boost liquidity. For example, in a 2-for-1 split, each stockholder receives one additional share for each share they hold. The share price is halved, but the total investment value remains the same.

Bonus Issue: A company issues free, additional shares to its existing shareholders. For example, in a 1:1 bonus issue, a shareholder gets one extra share for each share they own. Similar to a split, this increases the number of shares and reduces the share price, keeping the total value constant.