See bonus issue. Dresdner Kleinwort Wasserstein financial glossary
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When a company transfers money from its reserves to its permanent capital it issues free shares to existing shareholders. The new shares are distributed in proportion to their existing holdings. Also known as a capitalization issue or a scrip issue.
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free issue UK US noun [C] (also scrip issue, also bonus issue, also capitalization issue) STOCK MARKET
► an offer by a company of extra shares to its shareholders for free: »
Many customers hold shares which they received as a result of a free issue of stock last year.
Financial and business terms. 2012.