Question

Issue of bonus share is which activity incash flow

Answer 1

Bonus shares are also issued to restructurecompany reserves. Issuing bonus shares does not involve cash-flow. It increases the share capital of the company but not its net assets. Bonus shares are issued to each shareholder according to their stake in the company.

Answer 2

A bonus issue, also known as a scrip issue or a capitalization issue, is an offer of free additional sharesto existing shareholders. A company may decide to distribute further shares as an alternative to increasing the dividend payout. For example, a company may give one bonus share for every five sharesheld.