Bonus issue (scrip issue

Issue of new fully paid shares in a company to existing shareholders for free on a basis pro rata to existing holdings. For example, a 1 for 4 bonus issue would mean that a shareholder would receive one free share for every four existing shares they own in the company. The impact of a bonus issue is to reduce the share price, since the same total market capitalisation is being spread over a larger number of shares. This may have a beneficial impact in terms of liquidity of trading.