What is a Bonus Issue

What is a bonus issue prime interest I’ll being created at six hundred rupees and the company has recently declared a to is to one bonus issue Amit owns a few shares of prime infra but doesn’t understand what’s in it for him so his friend Vinod a seasoned investor with Angel Broking explained the two insta want bonus issue means you will get two three shares for every one shed that you own with 100 shares of prime infra Amit will now get an additional 200 shares taking his total took 300 shares but because the number of shares has tripled the price of each share is now one third of the previous value since each prime infra 600 rupees before the bonus issue it will now be two hundred rupees though the number of shares on it owns has increased from 100 to 300 the total value of his investment remains the same so why did Prime infra issue bonus shares to reward the investors and gain their confidence as well as attract new investors on it now understands what a bonus issue is.