Bonus Share

Bonus Share - A bonus share is free shares of certain stocks that are given to the current shareholders. Generally, this is based on the current number of shares the shareholder already has or owns. Although the free shares increase the number of shares held by the shareholder, it doesn't increase the amount of value shares held by the shareholder. This happens because although the total number of the shareholder's share have increased, the ratio of the shareholder's shares held to the number outstanding remains still remains constant; therefore, the value remains the same.