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Difference between bonus and split?

What is the difference between a bonus issue and split in share markets? Price falls in the case of both...


  • Bonus shares are the additional shares given to the shareholders by the company. This is a method of rewarding the shareholders. Companies accumulate its profits in the reserve fund. During bonus share, these reserve funds are converted into share capital and distributed among its shareholders as a bonus.

    In a stock split, the company splits the share price into different parts. For example, in a stock split of 1:1, stock price splits into two parts. In a stock split of 1:5, stock splits into 5 parts.

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