This Bonus shares: Bonus shares are issued by the

This internship is about thestudy on impact of stock announcements on share price behavior. Stock announcementis an official public statement for a particular period of time which contains company’sprofitability which is made on yearly or quarterly basis. A stock announcement isdone on a specific date by the company in the earning season and it is estimatedby the equity analysts. For determining stock price behavior equity analystsuse random walk theory technique.Under stock announcementthere are four categories namely,       I.

           Bonus shares.     II.           Rights issue.  III.           Buyback shares.  IV.           Stock splits.

 I.                  Bonusshares: Bonusshares are issued by the company to the existing shareholders, according toCompanies’ Act, 2013 the bonus share are issued at free of cost and it shouldbe fully paid by the company who are issuing bonus shares. It is also known asbonus share issue or bonus issue and it is issued on the basis of shares whichis already owned by the existing shareholders of the company. While issuingbonus shares to the shareholders it increases the total number of shares issuedand owned by the company and the value of the company does not change. When thenumber of issued shares are increased the ratio of existing shareholders willbe remained constant.II.

               Rightsissue:Rightsissue is a dividend of rights of the company’s existing shareholders to buy thefurther securities in the company. It is issued in the public company forraising their capital and it is also a tax free dividend on the ratio basis tothe existing shareholder of the company. It is either transferable or not, shareholdershave the rights to sell their subscription to others in open market or they canown their subscription. Company’s existing shareholders have the advantage ofbuying a specific number of shares at the quoted price within the subsidyperiod fixed by the company.