Question

issue of bonus share is a remedial measure for _____​

Answer 1

Answer:

under capitalisation

Explanation:

i am thinking this will be the answer

not sure for this

Answer 2

Answer:

issue of bonus share is a remedial measure for capitalisation

Explanation:

Under-capitalisation is just the reverse of over-capitalisation. Properly speaking, an enterprise is said to be under-capitalised when its actual capitalisation is lower than the proper capitalisation. In case of under-capitalisation, the rate of dividend and the market value of shares are fairly higher than the market value of shares of similar enterprises. According to Gerstenberg, “An enterprise may be under-capitalised when the rate of profit is exceptionally high in relation to the return enjoyed by similar situated enterprises in the same industry. The assets may be worth more than the values reflected in the books.”