Question
If shares are issued by the companies to existing
shareholders free of cost by capitalization of accumulated reserves from the profits earned in earlier years or share premium account are known as:Solution
If shares are issued by the companies to existing shareholders free of cost by capitalization of accumulated reserves from the profits earned in earlier years or share premium account are known as Bonus Shares. Shares issued of the companies by giving the option to existing shareholders to purchase at generally a price lower than the market price is known as Right Issue.Â
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