Disadvantages of bonus shares posted by Rajani Sharma
What are the disadvantages of issuing bonus shares?
The disadvantages of issuing bonus shares are:
1) To the company - as issue of this may lead to increase in capital of the company.
2) Shareholder expect existing rate dividend per share to continue.
3) It also prevents the new investors from becoming the shareholders of the company.
4) Shareholder preferring cash to stock dividend may be disappointed.