Ever wondered why your broker buzzes about ‘bonus’ or ‘split’? These stock market staples—dividends, bonus issues, stock splits—distribute value uniquely. Grasping them unlocks doors to informed investing amid NSE’s 5000+ listings.
Dividends: Direct profit transfer. Declare 1:1 equity dividend? Get shares worth payout value. Cash dividends hit demat faster but face withholding tax. Blue-chips like HDFC Bank boast consistent 1-2% yields, anchoring volatile rides.
Bonus issues gift shares gratis. From accumulated profits, a 1:1 bonus doubles count, halves price. Market cap static, ownership diluted evenly. It’s psychological too—lower prices lure buyers, per behavioral finance.
Stock splits slice prices surgically. 3:1 means three shares per one, tripling liquidity. Unlike buybacks (value contraction), splits expand base. Amazon’s 20:1 split in 2022 exemplified access for all.
Investor playbook: Monitor ‘record date’ religiously—buy before, qualify. Post-event, analyze volume spikes for entries. Tax angle: Bonuses adjust cost basis; splits don’t. Combine with PE ratios for holistic views.
In sum, these aren’t jargon—they’re wealth multipliers. From Warren Buffett’s dividend loves to retail frenzy post-splits, history favors the prepared. Dive into market school today; tomorrow’s gains await.