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Abstract
Bonus share refers to the shares that are issued free of cost to the existing shareholders of a company. Bonus share is issued with the objective of bringing in line the amount of issued and paid up capital (Dhanya, 2017). The announcement of bonus issue by a company had a positive effect on the share price as from the investors point of view issue of bonus share signals profitability of the company and attracts investors. The paper aims to study the impact of bonus issue on the share price of the companies. The study is based on the secondary data extracted from the market (BSE and NSE) to measure the impact of bonus issue on share prices over the period of study.