The correct answer is: Face.
A bonus issue is a type of share capital increase where a company issues new shares to existing shareholders, without any additional payment being made. The new shares are issued in proportion to the existing shareholding, so each shareholder receives the same number of new shares as they already hold.
The purpose of a bonus issue is to increase the number of shares in issue without increasing the company’s assets or liabilities. This can be done to increase the liquidity of the shares, to make the shares more attractive to investors, or to increase the company’s market capitalization.
The face value of a share is the nominal value that is printed on the share certificate. It is the amount that is shown on the company’s balance sheet as the value of each share. The market value of a share is the price that is paid for the share on the stock market.
When a company makes a bonus issue, the face value of the shares remains unchanged, but the market value of the shares may increase. This is because the number of shares in issue has increased, but the company’s assets and liabilities have not changed. This means that each share is now worth a smaller proportion of the company’s assets, and so the market value of the shares may increase.
The following are the possible answers to the question:
- Face. The face value of a share is the nominal value that is printed on the share certificate. It is the amount that is shown on the company’s balance sheet as the value of each share.
- Market. The market value of a share is the price that is paid for the share on the stock market.
- Stock. Stock is a term used to refer to the shares of a company.
- Real. The real value of a share is the amount of money that the shareholder would receive if they sold the share.