Dividend — Sharing the Profit
When a company earns a profit, its management can choose to share a part of that profit with shareholders in cash. This payment is called a dividend. Not all companies pay dividends — some prefer to reinvest all profits back into growing the business instead.
Bonus Shares — More Shares, Same Value
Sometimes a company rewards existing shareholders with extra shares for free, called bonus shares — for example, a "1:1 bonus" means you get 1 additional free share for every 1 share you already own. Important: the company's total value does not magically increase just because you have more shares — the share price usually adjusts downward proportionally, so your overall investment value stays roughly the same immediately after a bonus. It is more like cutting the same cake into more, smaller slices.
Stock Split — Cutting the Cake Smaller
A stock split is similar in spirit — a company divides each existing share into multiple smaller shares (for example, one share becomes five shares), reducing the price per share while your total holding value stays about the same right after the split. Companies often do this to make each individual share more affordable, so smaller investors can buy in more easily.