무상증자 (musang jeungja)

Existing shareholders get new shares for free, moved from the company's reserves; no new money comes in.

무상증자 (musang jeungja) is a bonus issue: the company moves money from its reserves into share capital and gives shareholders new shares for free, for example one new share for every share held.

The company's value doesn't change, so the share price is adjusted down on the ex-rights date (권리락). Bonus issues sometimes draw short-term buying interest, but they don't add value by themselves.

Also called: bonus shares · capitalisation issue · stock dividend