Ploughing Back of Profits
S.V.N.M. Sastry1, A.V.N. Murthy2
1S.V.N.M. Sastry, Department of Commerce, Koneru Lakshmaiah Education Foundation, Vaddeswaram, A.P, India.
2A.V.N. Murthy, Department of Commerce, Koneru Lakshmaiah Education Foundation, Vaddeswaram, A.P, India.
Manuscript received on 30 June 2019 | Revised Manuscript received on 10 July 2019 | Manuscript published on 30 July 2019 | PP: 2710-2715 | Volume-8 Issue-9, July 2019 | Retrieval Number: I8981078919/19©BEIESP | DOI: 10.35940/ijitee.I8981.078919
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© The Authors. Blue Eyes Intelligence Engineering and Sciences Publication (BEIESP). This is an open access article under the CC-BY-NC-ND license (http://creativecommons.org/licenses/by-nc-nd/4.0/)
Abstract: Like other stakeholders, shareholders will also anticipate a fair return on their investment in the shares of the company of course in the form of dividend in majority of the cases. Though, the payment of dividend on equity shares is not mandatory, but the companies will pay the dividend during the years of profits to their shareholders. The cash payment of dividend may affect the liquidity position of the companies. Hence, the companies will try to pay dividend in the form of issue of bonus shares by capitalizing the profits or by ploughing back of past profits. The purpose of writing this article is to elaborate on how the bonus issue will be served as an effective tool to manage liquid sources of a company.
Keywords: Capitalization of profits, Issue of rights, Earnings per share and Employee Stock Option Plans.
Scope of the Article: Digital Rights Management