Which of the Following Statement About Bonus Shares Is NOT

question 45

Multiple Choice

Which of the following statement about bonus shares is NOT correct?

• A) Bonus shares are generally issued at no cost to the shareholders.
• B) If a company offers a 1 for 4 bonus issue this means for every 1 share a shareholder owns they get four extra shares.
• C) When shares go ex-bonus there should be a downward adjustment in the share price.
• D) If a company declares a bonus share issue this can be viewed by the market as a positive signal about the company's future profitability.

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Definitions:

Budgeted Sales

The expected sales (in units or dollars) projected for a future period, often used for planning and performance evaluation.

Average Unit Price

The price per unit determined by dividing the total cost by the number of units purchased or produced.

Planned Objectives

Strategic goals set by a business or organization to guide its operations and decisions.

Controllable Margin

The portion of profit or margin that can be directly influenced by managing the controllable costs in a business.