Difference Between Bonus Shares And Right Shares
The main dissimilarities or differences between right shares and bonus shares can be pointed as follows:
1. Introduction
Right Shares: Additional shares issued to the existing shareholders of the company at the discounted rate to raise capital
Bonus Shares: Free issue of additional shares to the current shareholders of the company
2. Purpose/Objective
Right Shares: To raise additional capital for business expansion
Bonus Shares: To improve liquidity position of the company
3. Price
Right Shares: Right shares are issued at a discounted price to the current shareholders
Bonus Shares: Free (Dividends are converted into shares)
4. Subscription
Right Shares: Minimum subscription requires
Bonus Shares: Minimum subscription not required
5. Price Of Share
Right Shares: Issue of right shares does not affect the price of share
Bonus Shares: Bonus shares decrease the price of share
Also Read:
Also Read:
6. Cash Receipt
Right Shares: Yes, a company collects cash by issuing right shares
Bonus Shares: No cash receipt
7. Paid Up Value
Right Shares: Fully or partially
Bonus Shares: Fully
Right Shares Vs Bonus Shares (Comparison Chart)
I hope this post is helpful to understand the difference between right shares and bonus shares and to make comparison between them.
Right Shares Vs Bonus Shares (Comparison Chart)
Basis For Difference
|
Bonus Shares
|
|
Introduction
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Shared issued by the company to current shareholders to raise additional capital
|
Additional shares issued to existing shareholders for free
|
Objective
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To raise capital
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To strengthen liquidity
|
Price
|
Discounted price
|
Free
|
Minimum Subscription
|
Required
|
Not required
|
Share Price
|
Not affected
|
Decreases
|
Cash Receipt
|
Yes
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No
|
Paid Up Value
|
Either fully or partially
|
Fully
|
I hope this post is helpful to understand the difference between right shares and bonus shares and to make comparison between them.
