# If ex-bonus, share price is split then what the point of bonus?
**URL:** https://tradingqna.com/t/if-ex-bonus-share-price-is-split-then-what-the-point-of-bonus/29193
**Category:** General
**Created:** [December 21, 2017, 11:58am UTC](https://tradingqna.com/t/if-ex-bonus-share-price-is-split-then-what-the-point-of-bonus/29193 "2017-12-21T11:58:49Z")
**Posts on this page:** 7
**Page:** 1
### Author:  [@scr](https://tradingqna.com/u/scr)
#### Post date: [December 21, 2017, 11:58am UTC](https://tradingqna.com/t/if-ex-bonus-share-price-is-split-then-what-the-point-of-bonus/29193/1 "2017-12-21T11:58:49Z")
If 1:1 bonus makes the price of your shared to drop by 50%, what is the point of bonus shares ? It is same as stock split. The dividend does not make any difference between the stock split or bonus share.
Does the Book Value remains remains after stock split or bonus ?
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### Author:  [@Sanket](https://tradingqna.com/u/Sanket)
#### Post date: [December 21, 2017, 12:08pm UTC](https://tradingqna.com/t/if-ex-bonus-share-price-is-split-then-what-the-point-of-bonus/29193/2 "2017-12-21T12:08:41Z")
> [@scr](#):
>
> Does the Book Value remains remains after stock split or bonus ?
Check this
> **[Corporate actions and impact on stock prices – Varsity by Zerodha](https://zerodha.com/varsity/chapter/five-corporate-actions-and-its-impact-on-stock-prices/)**
>
> Corporate Action of various types affect the share price of a company in many ways such as Bonus Issue, Dividend, Buyback, Stock Split, Rights Issue, etc
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### Author:  [@mac76](https://tradingqna.com/u/mac76)
#### Post date: [December 21, 2017, 12:09pm UTC](https://tradingqna.com/t/if-ex-bonus-share-price-is-split-then-what-the-point-of-bonus/29193/3 "2017-12-21T12:09:23Z")
Here you can find all the information needed.
Usually a company issue bonus shares to bring down the price ( So, more investors can purchase the stock), increase liquidity.
> **[Bonus Issues vs stock splits - Investar Blog](http://www.investarindia.com/blog/bonus-issues-vs-stock-splits/)**
>
> Bonus issues and stock splits are 2 well-known corporate actions that publicly listed companies undertake to boost the number of shares traded.
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### Author:  [@scr](https://tradingqna.com/u/scr)
#### Post date: [December 29, 2017, 7:51am UTC](https://tradingqna.com/t/if-ex-bonus-share-price-is-split-then-what-the-point-of-bonus/29193/4 "2017-12-29T07:51:47Z")
So that is basically stock split. As there is not difference between bonus shares and stock split. Only bonus shares sounds nice.
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### Author:  [@Srinivas](https://tradingqna.com/u/Srinivas)
#### Post date: [December 29, 2017, 8:35am UTC](https://tradingqna.com/t/if-ex-bonus-share-price-is-split-then-what-the-point-of-bonus/29193/5 "2017-12-29T08:35:58Z")
Some differences mentioned here:
> [@What is difference between Bonus Issue & Stock Split](https://tradingqna.com/t/what-is-difference-between-bonus-issue-stock-split/26067):
>
> In both the cases, Bonus & Stock Split, investors’ investment value remains the same e.g. [Zerodha-Varsity Bonus Issue](https://zerodha.com/varsity/chapter/five-corporate-actions-and-its-impact-on-stock-prices/) For Example: No of shares before Bonus & Split: 100 Value of per Share: Rs 75/- Total Investment Value: Rs 7500/- After Bonus & Stock Split (Ratio of 1:1) No of shares after Bonus & Split: 200 Value of per Share: Rs 37.5/- Total Investment Value: Rs 7500/- When the value of Investment remains the same, why one is called BONUS and another is called SPLIT?? Investor is get…
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### Author:  [@astuter](https://tradingqna.com/u/astuter)
#### Post date: [December 29, 2017, 8:49am UTC](https://tradingqna.com/t/if-ex-bonus-share-price-is-split-then-what-the-point-of-bonus/29193/6 "2017-12-29T08:49:03Z")
In case of bonus issue FACE VALUE doesn’t changes, while stock split will decrease the FACE VALUE as per the ratio.
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### Author:  [@trade100](https://tradingqna.com/u/trade100)
#### Post date: [December 29, 2017, 10:57am UTC](https://tradingqna.com/t/if-ex-bonus-share-price-is-split-then-what-the-point-of-bonus/29193/7 "2017-12-29T10:57:37Z")
Main point is face value remains same in the case of Bonus issue but face value is reduced in the case of stock split. Why this is good for investor in the case of Bonus shares ? if a company is issuing 20% dividend yearly to its investors, after extra bonus shares are issued to customers, this will mean they will receive more dividend as the dividend is issued on the face value of the share. In the case of stock split, no extra dividend is got as the face value is reduced after stock split.
How company is able to issue additional bonus shares without changing face value ? Company uses the capital reserve fund which can be considered as the accumulated profit to fund the issue of bonus shares. So bonus issue is a way of passing on the company’s profit to its investors.