How Bonus Shares Create Enormous Wealth

HOW BONUS SHARES CREATE ENORMOUS WEALTH - EXAMPLE

We've all heard of financial advisors recommending to stay invested in equities for the long-term. Found an interesting article which gave an example of wealth creation that one only dreams of.

Disclaimer: Readers please be advised, this is only information found on the public web, and we (the blogger(s)) do not claim or take responsibility for the accuracy, validity, errors or recommendation of the stocks or companies, their performance, etc. quoted below. Readers must verify the information on their own before taking any decision related to this.

(Source: http://www.sharemarketschool.com/declaring-bonus-shares-is-a-positive-sign/)

Bonus shares, in the long run would create enormous wealth for the investor.
For example, a Rs 10,000 invested in Wipro in 1980 would have grown into several Crores as shown below:-

In 1980 You buy 100 shares @ Rs 100 per share in your name . In 1981 company declared 1:1 bonus = you have 200 shares

In 1985 company declared 1:1 bonus = you have 400 shares. In 1986 company split the share to Rs. 10 = you have 4,000 shares

In 1987 company declared 1:1 bonus = you have 8,000 shares. In 1989 company declared 1:1 bonus = you have 16,000 shares

In 1992 company declared 1:1 bonus = you have 32,000 shares In 1995 company declared 1:1 bonus = you have 64,000 shares

In 1997 company declared 2:1 bonus = you have 1,92,000 shares. In 1999 company split the share to Rs. 2 = you have 9,60,000 shares

In 2004 company declared 2:1 bonus = you have 28,80,000 shares. In 2005 company declared 1:1 bonus = you have 57,60,000 shares

In 2010 company declared 2:3 bonus=you have 96,00,000 shares.
Share price of Wipro is Rs 428.00 in July 2010

The value of 57,60,000 shares in 2010 – 406.60 Crores.