A bonus issue of shares by a company will:
A) increase total shareholders' equity.
B) reduce total shareholders' equity.
C) sometimes increase shareholders' equity and sometimes leave it unchanged.
D) leave total shareholders' equity unchanged.

Question

Quizplus · Accepted Answer

A bonus issue of shares involves converting a company's retained earnings into share capital. It redistributes the company's equity without changing the total shareholders' equity, as it does not involve any cash flow.

A Bonus Issue of Shares by a Company Will