Chapter 2: Basic Terminology - Stock Splits & Bonus Shares

**Bonus Share** What are Bonus Shares? Bonus shares are additional shares issued by a company to its existing shareholders without any additional cost. They are typically issued from the company\'s retained earnings or reserves. This means the company doesn\'t have to raise new capital from outside...

**Bonus Share** What are Bonus Shares? Bonus shares are additional shares issued by a company to its existing shareholders without any additional cost. They are typically issued from the company\'s retained earnings or reserves. This means the company doesn\'t have to raise new capital from outside sources. **Why do companies issue bonus shares?** - - - **Real-World Example: Reliance Industries** In 2020, Reliance Industries, one of India\'s largest conglomerates, announced a bonus share issue. For every one share held, shareholders were entitled to receive one bonus share. This meant that if an investor held 100 shares before the bonus issue, they would receive an additional 100 shares. **Impact of the Bonus Share Issue:** - - - Key Points to Remember: - - - **SPLIT SHARE** **What is a Stock Split?** A stock split is a corporate action where a company divides its existing shares into smaller units, increasing the number of shares outstanding while reducing the price per share. Essentially, it\'s like cutting a pizza into more slices without changing the size of the pizza itself. Why do companies split their stocks? - - - **Real-World Example: Apple Inc**.  In 2020, Apple Inc., one of the world\'s most valuable companies, announced a 4-for-1 stock split. This meant that for every one share held, shareholders would receive three additional shares. For instance, if an investor owned 100 shares before the split, they would own 400 shares after. **Impact of the Stock Split:** - - - **Key Points to Remember:** - - - **SPLIT SHARE vs BONUS SHARES** **Market Trends: A Brief Overview** ----------------------------------- **Market trends refer to the general direction in which the market is moving. This can be upwards (bull market), downwards (bear market), or sideways (ranging market). Understanding market trends is crucial for investors as it can help them make informed decisions.** ### **Key Market Trends** 1. - - - 2. - - - 3. - - ### **Factors Affecting Market Trends** - - - - - ### **Analyzing Market Trends** - - - ### **Correction** - - - ### **Crash** - - - ### **Types of Trading** 1. - - 2. - - 3. - - 4. - -