How Issue of bonus shares affects the total capital structure of the company?

The issuance of bonus shares generally does not affect the total capital structure of a company in terms of total equity, as it redistributes retained earnings into issued share capital without raising new funds. However, it increases the number of shares outstanding, which can dilute earnings per share (EPS) and potentially influence market perceptions. Additionally, the market capitalization may adjust as investors react to the change in share structure. Overall, while the total capital remains unchanged, the composition and market perception of the equity can shift.