view 'scrip problem'.
Fully paid-up brand new common stock (ordinary shares) given able to present stockholders (investors) compared for their existing stock/shareholdings. A bookkeeping transaction (because no cash modifications hands), it capitalizes an integral part of reserves (retained profits) to bring (1) share money more in line with the assets employed; and (2) increased share cost to a far more manageable quantity, hence boosting its marketability. Although the few stocks held by each shareholder increases, the worth for the total shareholding remains the identical to before the bonus concern. Also called scrip issue, bonus stocks, or capitalization issue. See also rights issue.