Name three (3) corporate action types
Answers were Sorted based on User's Feedback
Answer / vaheed
Types Of Corporate Actions
Corporate actions are classified as mandatory, voluntary and mandatory with choice corporate actions.
Mandatory Corporate Action: A mandatory corporate action is an event initiated by the corporation by the board of directors that affects all shareholders. Participation of shareholders is mandatory for these corporate actions. Mandatory Corporate Actions Includes Cash Dividend, Stock Splits, Mergers, Pre-refunding, Return of capital, Bonus Issue, Asset ID Change, Pari-passu and Spinoffs.
Stock Split and Reverse Spilt: A corporate action in which a company’s existing shares are divided into multiple shares. For Ex. A company with 100 shares of stock price Rs 50 per share (100*50 = 5000). The company splits it shares 2 for 1. There are now 200 shocks for Rs 25 each (200*25 = 5000) . The reason why companies split their stock is to make them more affordable to investors because stock price reduces after it is split. Likewise, reverse split increases the stock price while reducing number of outstanding shares.
Spin-Offs: Spin off means a company breaking up itself into smaller units. The creation of an independent company through the sale or distribution of new shares of an existing business/division of a parent company.
Dividend Payouts: Dividend is the payment made to the investor for sharing the profits a company has made.
Mergers and Acquisitions: Mergers is a event where two or more companies merge into one aiming to be more competitive and for more profitability. Likewise Acquisition means a bigger company acquiring a smaller one for further expansion.
Bonus Issue: It is an additional dividend given to the shareholders that can be in cash or in the form of stock. When companies have outstanding performance with surplus profit, they may decide to issue bonus to the shareholders.
Voluntary Corporate Action : Voluntary corporate actions, are actions requiring a decision from the investor on whether or not to participate. Corporation will not process these actions automatically because the decision on whether to participate will vary for every investor. Shareholders may chose to take no action which will leave their securities unaffected by the Corporate Action. Voluntary corporate action includes Tender Offer, Rights issue, Making buyback offers to the share holders while delisting the company from the stock exchange etc.
Buyback: Buyback is an action in which company offers to buys back its stock from the current share holders at an attractive price. The reason is to reduce the shares outstanding in the market or to reduce the stake of shareholders in company.
Rights Issue: It refers to offering additional shares to the current shareholders of the stock. This is done by companies to raise capital for further expansion which provide its existing shareholders the right to buy the stock at discounted rates than price making it more lucrative.
Mandatory With Choice Corporate Action : This corporate action is a mandatory corporate action for the shareholder but they are being presented with options. An example is cash or stock dividend option with one of the options as default. Share holders may or may not submit their elections. In case a share holder does not submit the election, the default option will be applied.
Dividend Payouts: Dividend is the payment made to the investor for sharing the profits a company has made. It can be cash dividend or stock dividend where company offers stock as a dividend to the current shareholders.
Is This Answer Correct ? | 15 Yes | 1 No |
Answer / kiran
stock split,dividend,merger , acquisition,spin off,rights issue
Is This Answer Correct ? | 6 Yes | 2 No |
Answer / santhireddy
mandatory corporate action,voluntory corporate action,mandatory with choice corporate action
Is This Answer Correct ? | 4 Yes | 1 No |
Answer / bijay kumar arakh
corporate actions are acquisition,merger,spin off,stock split,bonus issue ec
Is This Answer Correct ? | 0 Yes | 1 No |
I wana give interview as a accountant what the question will asked by interviewer ??? Please suggest me so I can clear inteview. abhinandan
what is ccr rate
What is PBG & ABG in term of Contract for supply?
2 Answers ITP, JDM Pharmatech, Jubilant Organosys,
I have a questions regarding booking transaction. what is I want to loan my company 10k transaction will be recorded as follows "CASH" 10k debit "Payable to partner" 10K as credit. So when I used company debit card for my personal use can I book this as a loan repayment? which means I will have to Debit account " Payable to Partner and credit "Cash"
FIXED Asset - What is the most used method/right method in Depreciation in India and other countries..? (ie., Straight line method,Written down value method. or etc.,). The calculation for depreciation how it stand commonly in all organization..? Is there any difference between companies and assets..? Your answer will be highly appreciated. Thanks in advance.
From the following Trial Balance of Seema Garments as on 31st Dec., 2007, prepare Trading Profit and Loss Account and Balance Sheet: Dr. Rs. Cr. Rs. Opening Stock 15000 Purchases and Sales 109000 180000 Manufacturing Wages 8000 Fuel, Power and Lighting 12000 Salaries 11000 Income Tax 5500 Loan to Mr. X at 10% pa. 5000 Interest on Mr. X’s Loan 300 Apprentice Premium 4500 Rent 4000 Rent Owing 600 Furniture (includes furniture of Rs.1000 purchased on 1st July, 2007) 5000 B/R and B/P 6000 1600 Plant 72000 Debtors and Creditors 28000 13000 Capital 100000 Cash 19500 300000 300000 Informations: 1. Closing Stock was valued at Rs. 30,000. 2. Goodsworth Rs. 5000 was sold on 28th December, but no entry was passed to this effect. 3. Goods costing Rs. 7000 was purchased and included into Stock but no entry was passed to record the purchases. 4. Create a provision of 2% for discount on debtors. 5. Apprentice premium received on 1st January, 2007 was for 3 years. 6. Depreciate the furniture by 10% p.a. 7. Salaries for the month of December, 2007 are still outstanding.
What are the 4 types of ppe?
What is the difference between a provisions and reserves?
Do you have any idea about gst?
Profit or loss on revaluation is shared among the partners in _______ ratio. (a) Old Profit Sharing. (b) New Profit Sharing. (c) Capital. (d) Equal.
If in Baance sheet Furniture is given @ rs.1200000. and an adjustment tells that half of the building is used for residential purpose... then what is treatment in accounts?
under which accounting rule prepaid salary?