FVPV

bonus shares are issued free to existing shareholders.
as a result of that - the total # of shares issued increases - and the "market cap" - which is # of shares issued * par value increases.

this is instead of paying dividends - company is issuing bonus shares.

2 options the company has -
a. declare a dividend per share, pay that to its shareholders.

b. take the total declared dividend amount it would have paid, divide by par value of the shares - and say we will issue that much extra shares to the existing shareholders.

either way it is the same.

but in the 2nd case - the dividends were paid out (thro' the shares) but the total capital of the company increased as a by-product.

Paid up capital - is what the shareholders actually paid up to acquire the company's shares. It is equal to the Par Value (Face Value) * # of Shares issued + any additional paid up capital.

e.g. company has par value of 1$ per share, but issues share at 15$ per - e.g.
and it has 1 Mill shares.

Face Value = 1 Mill $
Additional Paid up = 14 Mill

Total Paid up Capital = 15 Mill

CP