Q1. [1] § Which are the securities one can invest in? § Unit Code: 3 — Unit Title: Primary Market
Companies may issue shares to their shareholders without charge, proportionate to the number of shares owned by each shareholder. Identify the share.
- (A) Equity share
- (B) Rights issue
- (C) Preference share
- (D) Bonus share
Previously asked in CBSE board exam
2026 92 Q4 (iii)
Generated by claude-sonnet-4-6 · 2026-06-15 07:06 · grounding rag
Model Answer
(D) Bonus share — Shares issued by a company to existing shareholders free of charge, in proportion to the number of shares already held, are called Bonus shares.
Explanation
The key phrase "without charge, proportionate to shares owned" defines a bonus issue (bonus shares). Rights issue involves shareholders buying additional shares at a discount, not for free. Equity and preference shares are types of shares, not corporate actions matching this description. Examiners look for the exact term "Bonus share."
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