Financial Glossary what is capitalisation


Capitalisation

The injection of capital into a company. For example, the process by which a company converts its cash reserves into new shares and issues them to existing shareholders on a pro rata basis. Also known as a scrip issue, or bonus issue. Note that since the effect of a capitalisation issue is to increase the number of shares in the company, the market price of the shares will typically fall to reflect the dilution.
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