A bonus issue is usually reported as X nos of Shares for every Y nos of shares held. However, it can be confusing sometimes when a company says it is paying 7 shares for every 3 held or 10 shares for every 4 held. This can cause a temporary Arithmetical quagmire. This is a simple way to calculate Bonus shares without having a mathematical headache.
Assuming a company declares a Bonus Issue of 25 shares (X) for every 1 (Y)held. If you had 2000 shares (Z) your bonus issue will be 2000 shares multiplied by 25 (X) which is 2000 x 25= 50,000. That is you get an additional 50,000 units.
What if it is 7 for every 2 held. Then is will be 2000 times 7 = 14,000. You then divide that by 2 which is 7000. The formula therefore is
X= Bonus per unit
Y=For every unit held (Existing)
Z= What you own
Total Bonus You get is therefore =
| X *Z |
| Y |
In summary multiply the total number of shares that you currently have (Z) by the bonus share per unit (denoted by X) then divide the result by the represented share per unit denoted by Y as above.
Send me an email if you want the formula in Excel.