shreya sharma (trainee) (107 Points)
15 October 2012hey all,
My questions is after bonus issue why share prices get decline and is it by market forces as more liquidity arise or is it arithmetically decided by the stock exchange like share of rs. 500 bonus issue 1:4, so, share prices after ex-bonus 100.
my main point is, is it arithematically divide by the stock exchange proportionately as EPS goes down or the market forces affects, which randomly declines to near by the proportionate price.
shreya sharma
*RENU SINGH *
(✩ §m!ℓ!ñġ €ม€§ fℓม!ñġ ђ♪gђ✩ )
(21627 Points)
Replied 16 October 2012
if you even noticed or heard that prices of shares rises before issuing of Bonus ....
as it ultimately increases the value ... like buy 4 shares and get 1 shares free ...
and after the bonus schemes get over... now ppl start selling those extra shares which affects the demand
and supply and ultimtely decrease in value of shares after announcing the bonus shares.
the same happens with the case of dividends as well ...
anyways ... let's wait for expert's interpretation 
CAclubindia
