Bonus Share Calculator
Calculate the exact impact of free bonus shares on your total holdings and new stock price.
How to Evaluate Bonus Issues
A bonus share issue is an exciting corporate action, but it's important to understand the math. Use the Bonus Share Calculator to accurately predict how many free shares will automatically drop into your Demat account, and what the adjusted trading price will be.
How it calculation works:
- Current Holdings: Enter the number of shares you own before the record date.
- Current Price: Enter the stock price right before the ex-bonus date.
- Announced Ratio: The format is usually (Free Shares) : (Held Shares). Example: 1:1.
- Calculate: Find out your new total share balance and the mathematically adjusted share price.
The Mathematical Adjustment
If the ratio is X bonus shares for every Y held shares:
New Shares = (X / Y) × Holding
New Price = Old Price ÷ (1 + (X / Y))
- Capital Neutral: Just like a slice of pizza cut into more pieces, the overall pie size doesn't change purely based on the bonus math.
Why Do Companies Give Bonus Shares?
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Reward ShareholdersCompanies use accumulated reserves to reward long-term investors without paying out actual cash.😊
Increase ConfidenceA bonus issue signals that management expects future earnings growth to support a larger equity base.🌊
Boost LiquidityBecause the stock price decreases, it becomes more affordable to retail investors, increasing daily trading volume.