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Criteria for fluctuations on bonus issue

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(Querist)
19 May 2008 What is the criteria for the changes in the rate of stock on bonus issue
for sure the share will fall from the point of issue on excess shares floated in the market. How much does it fall?
Can we estimate the fall approximately?
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CA. Yayati Tyagi

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CA. Yayati Tyagi (Expert)
19 May 2008 In my opinion, if say company issues 1 bonus share for every 2 shares (assume cum-bonus price 100 each) held, theoritically the ex-bonus price should be 200/3 = 67 each. means total market value in hands of an investor should not change.
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S.Srinivasaraghavan

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S.Srinivasaraghavan (Expert)
20 May 2008 Yes that is the theoretical perception.
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