How to Calculate Bonus Shares and the Ex-Bonus Price

What a bonus issue changes

A proportional bonus adds shares to an eligible holding. To read the result correctly, separate the number added, the number held afterwards and the theoretical price on the enlarged share basis.

The calculation assumes no new subscription cash and isolates the change in units before market movement or settlement.

Read the ratio as additional shares for shares held

Q is the eligible opening holding and P is its pre-bonus reference price per share. A-for-B means A additional shares for every B held. The opening holding remains part of the total. A 1-for-3 bonus adds one share to every three and leaves four in total.

A company may describe a stock dividend or a bonus issue in words. Use the stated number of additional shares rather than guessing from a headline or from the post-issue total.

Reconcile a holding and a reference price

Use the calculation to check ratio direction, compare equivalent ratios and identify a repeating or tiny entitlement before considering account settlement. Use a pre-bonus quote on the same share basis as the opening holding.

Calculate bonus shares, total and theoretical price

Compute bonus shares as Q × A/B. Add them to Q to find total shares. Multiply P by B/(A+B) to obtain the theoretical ex-bonus reference price. The unrounded total shares times that price equal the opening product Q × P. Use the exact whole and reduced fractional components to reconcile the additional entitlement.

Bonus shares = Q × A / B

Verified 1-for-3 and 1-for-1 examples

With 100 eligible shares at 12 and one bonus share for every three held, the entitlement is 100/3 shares, or 33 whole shares plus 1/3. The total is 400/3 shares and the theoretical price is 9. Both modeled position values are 1,200 before settlement or market changes. A 1-for-1 bonus on 7 shares at 10 gives 7 additional shares, 14 total and a reference price of 5.

1. Multiply 100 by 1/3 for exactly 100/3 bonus shares.
2. Add the opening 100 to obtain 400/3 total shares.
3. Multiply 12 by 3/4 to obtain the theoretical price of 9.
4. Reconcile the unrounded position value to 1,200.

Enter opening shares and the offer terms

Use the issuer notice to identify the number of additional shares and the number held. Enter the eligible holding you want to model and a pre-bonus reference quote in one major currency. Calculate and check the additional shares, total, exact remainder and modeled value.

For 1-for-3, enter 1 in the additional field and 3 in the held field. The reference price describes one pre-bonus share.

Separate modeled entitlement from shares credited

The extra shares do not imply a gain in modeled wealth. The proportional share increase is offset by a lower theoretical price per share. Actual prices and credited shares depend on market movement and issuer or broker settlement. The whole component is only a mathematical decomposition.

For 33 whole shares and 1/3 of another share, the total is a theoretical 33⅓ additional shares. That figure alone does not identify whether an account receives a fraction, a rounded amount or cash.

Bonus shares, stock splits and rights issues

A 1-for-3 bonus adds one unit per three held and resembles a 4-for-3 split in this narrow arithmetic model. A 1-for-3 split is a reverse split that replaces three shares with one. See the Stock Split calculator for the replacement convention.

A paid rights issue changes the model by adding cash at the subscription price. Use the Rights Issue tool to compare take-up and relative dilution. Neither formula determines actual eligibility or legal treatment.

Why modeled value is preserved

One proportional issue on a consistent share basis with no subscription cash. This model assumes a value-preserving reference adjustment before settlement. It does not infer an event date or apply the adjustment to a quote that already reflects the same bonus.

The value identity follows from multiplying by reciprocal factors. It does not say how the market reacts to news or how the transaction affects tax records.

Precision and supported boundaries

Opening shares and reference price allow explicit zero through 1e12, with up to 12 fractional places and 48 trimmed characters. Each ratio term is a positive integer through 1,000,000. Exact ratios preserve the reduced fraction before 80-significant-digit decimal conversion. Shares and price display up to 12 significant figures.

The exact bonus entitlement can remain fractional even when its decimal display appears whole. Money is shown to cents with tiny-value markers. Use the opening value for reconciliation instead of multiplying rounded displays.

Avoid mixing share and price bases

Do not read the additional-for-held bonus ratio as a new-for-old split ratio. Do not use a cash dividend percentage, purchase price or face value as the reference quote. Keep pounds and pence consistent, and use the exact decomposition when a displayed decimal rounds near a whole share.

If a quote already reflects the bonus, adjusting it again double-counts the change. If the announcement expresses the distribution as a percentage, first confirm that it is a percentage of shares held rather than a percentage of nominal value or cash.

Read terminology across five markets

USA, UK, Canada, Australia and India select USD, GBP, CAD, AUD and INR formatting. Issuer terminology varies. NSE educational material uses an additional-for-held bonus ratio. The Canadian issuer example describes a stock dividend of three additional shares for each held.

The LSE and ASX-hosted documents illustrate issuer-specific language. Match the share basis and currency units to the announcement. Do not infer settlement or tax treatment from an example in another market.

Educational scope

Educational theoretical model. It does not determine eligibility, delivered shares, record or ex-dates, broker rounding, cash-in-lieu, tax or cost basis, fees, FX or observed trading prices. It does not provide personalized investment advice.

Use issuer materials and the account statement to confirm terms that are outside the model.

Frequently asked questions

Sources and review

Sources reviewed Nov 7, 2026. Consult current local rules before relying on time-sensitive information.

• SEC guidance on stock dividends
• LSE issuer bonus-share announcement
• Canadian issuer stock dividend example
• ASX issuer prospectus
• NSE corporate actions education