Calculate Bonus Adjusted Price | Stock Dividend Adjustment

Topic: Calculate Bonus Adjusted Price | Stock Dividend Adjustment When dividend is declared and distributed, stock price adjusts in line with dividend amount. Dividend adjustments take place after the record date. If a company declared Tk. 1 cash dividend, in such case after the record date, stock price should decrease by Tk. 1. If a company declares stock dividend (otherwise known as bonus dividend) in such case price is adjusted by the value of additional number of shares issued. For example, a company’s share with face value of tk 10 having market price of Tk 10 as well before the record date. If 10% stock dividend or in other words bonus dividend is declared. After record date, price will be adjusted by the dividend amount. Adjusted price will be 10/(1+10%) = tk. 9.09. Presented by Shihab Alam Khan on behalf of Finance School

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