Bonus issue

In stocks, when companies increase the number of its stocks, shareholders are issued additional shares to compensate with the diluted value of the stock based on the shareholder's percentage of ownership with the company.

If a company has 100 shares and a shareholder owns 20% trading at $1 a share, newly created shares would dilute the value of the share price. A company issuing out another 100 shares would put the stock price at $0.50 and thus another 20 shares must be issued to the shareholder to maintain its 20% stake in the company.

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