Two Kinds of Extra Shares: Bonus Shares vs. Right Shares
Bonus shares and right shares are two different ways a company can issue new shares…
Payouts from public listed companies refer to the corporate distribution of profits or value back to shareholders, primarily through cash dividends, bonus shares, and right shares. A cash dividend is a direct monetary payment made to investors from net earnings, providing immediate return on investment; bonus shares (or stock dividends) are additional free shares issued to existing shareholders proportionally, converting company reserves into equity without altering cash flow; and right shares offer existing shareholders the preferential privilege to buy new shares at a discounted price before they are offered to the general public, allowing investors to maintain their ownership percentage while raising new capital for the business.