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      Question

      Which of the following statement is true in case of

      bonus issue?
      A Bonus shares may be issued to convertible debenture holders at the time of conversion of such debentures into shares. Correct Answer Incorrect Answer
      B Convertible debenture holders will get bonus shares in same proportion as to the existing shareholders. Correct Answer Incorrect Answer
      C Both (a) and (b). Correct Answer Incorrect Answer
      D None of the above Correct Answer Incorrect Answer

      Solution

      Explanation: Convertible debenture holders are not shareholders until they convert their debentures into shares. Bonus shares can only be issued to shareholders. Hence, statement (a) is incorrect. Statement (b) is correct.

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