they already have a lot of shares floating in the market. wont that make it less valuable?

More at: r/NepalStock by _throwawaymaybe

7 comments
  1. >they already have a lot of shares floating in the market. wont that make it less valuable?

    Shares become diluated, so earning per share will be lesser but I don’t know what you meant by less valuable.

    Face value remains 100rs. With every bonus share, 100rs goes into paid-up capital. In that sense, companies get bigger!

    Bonus shares have their own plus and minus sides. The biggest minus side of bonus share is unncessary capital gains tax. However, bonus shares increase the number of shares in circulation, which thereby helps convert shares into cash more easily e.g. it’s easier to sell 50 shares when you have 100 shares than when you have just 10 shares and you need money worth the 5 shares.

  2. Until NRB forces them to give out bonus shares instead of dividend they will keep on giving out bonus shares…

  3. As long as the company keep growing their earnings. If the company grows earnings by 20%, then issuing a 20% bonus is fine.

    If you’re not bullish on the Nepal economy then you shouldn’t be investing in banks for the long term anyway. Despite everything I expect our growth to be significantly higher.

  4. Yo kura bujdainan aileka bull market ka expert haru le bonus ko lollipop khayera basne Hun yeni haru bank ko profit kattiko badecha last 5 yrs ma roe k Bhai rakheko cha Matlab chaina distributable profit/no of share garera CFA,CA bhanda thulo analyst paltinchan

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