free reserves
free interest
free bonus
free cash dividend
Answer is Wrong!
Answer is Right!
The correct answer is: A. free reserves.
Free reserves are the reserves that are available for distribution to shareholders as bonus shares. They are created out of the profits of the company that have not been distributed as dividends.
The other options are incorrect because:
- Free interest is not a type of reserve.
- Free bonus is not a type of reserve.
- Free cash dividend is not a type of reserve.
Bonus shares are shares that are issued by a company to its existing shareholders without any additional payment. They are issued out of the company’s reserves. The purpose of issuing bonus shares is to increase the number of shares held by the existing shareholders and to improve the liquidity of the shares.