Why has the average price been reduced after receiving bonus shares in Bigul?
The average price, or buy average price, of a stock is reduced after the credit of bonus shares to the account because the bonus shares are credited at no cost, and the holding average is calculated using the First In First Out (FIFO) method. As bonus shares are free, their buy price is considered zero. Thus, when these bonus shares are added to the demat account at a zero cost, the buy average is changed.