Question

Holdings of minority will …………………by the number of bonus shares received by them.​

Answer 1

Answer:

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Answer 2

Their holdings will remain the same as before.

Holdings of minorities will remain the same because the bonus share increases the number of shares held by them and it also increases the paid-up value of a company but it will not affect the holdings of any investor.

Bonus shares are issued by the company to its existing shareholder because the company has sufficient profits in the form of a capital redemption reserve, so the company decides to capitalize its free reserve by issuing the bonus share to the shareholders.

     Reserve and surplus a/c dr.   xx

        To share capital a/c                  xx

As the bonus share gets issued in the format of some shares held by the shareholder, suppose for every 10000 shares gets 2000 bonus shares, so in such case, the holdings of shareholders remain the same.