Share Market School

Understanding Rights Issue

WHAT IS IT?

A rights issue is an issue of new shares for cash to existing shareholders in proportion to their existing holdings. A rights issue is, therefore, a way of raising new cash from shareholders – this is an important source of new equity funding for publicly quoted companies.

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Dividends and relevant dates

Hi there,

We covered dividends in our last article Dividends vs bonus. The purpose of this article is to make you aware of the process of dividend payment and its effect on stock prices.
There are five major dates in the process of a company paying dividends. These are:
1. Dividend declaration date,
2. Last Cum-dividend date
3. Ex-date,
4. Date of record or record date and
5. Date of Dividend payment.

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Dividends vs Bonus

WHAT ARE DIVIDENDS ON STOCKS?

When you buy a company’s shares you expect that company to make a profit. The profit that company makes is then divided among the shareholders on a ratio proportional to the number of stocks one has. Dividend on stocks is therefore the proportion of a company’s profit that it pays to its shareholders. This is usually declared as a dividend per share. Although a company makes profit, they are in no way obligated to pay

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How is a bonus issue different from a stock split?

Hi there ,

Most readers seem to have some confusion about whether bonus issue and stock splits are the same or not.   They may appear to be the same especially in the eyes of a person not well-versed in finance. But they are, in fact, two different things. This article will help you to get a clear picture of the difference between the two.

WHAT’S THE DIFFERENCE?

Simply put- A bonus is a free additional share. A stock split is the same share split into two.

Usually companies accumulate it’s earnings in reserve funds instead of paying it to share-holders in form of dividend. This accumulated reserve fund is then converted into share-capital and allotted to share-holders as bonus shares in proportion to their existing holding. So, Share-capital of the company increases with a concomitant

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• Category: Beginner's Lessons, More ... from stock markets.