what is corporate action? wt is the purpose and tpes of
corporate actions?
Answer Posted / guest
A corporate action is an event initiated by a public
company that affects the securities (equity or debt) issued
by the company. Some corporate actions such as a dividend
(for equity securities) or coupon payment (for debt
securities (bonds)) may have a direct financial impact on
the shareholders or bondholders; another example is a call
(early redemption) of a debt security. Other corporate
actions such as stock split may have an indirect impact, as
the increased liquidity of shares may cause the price of
the stock to rise. Some corporate actions such as name
change have no direct financial impact on the shareholders
Purpose:1).Return profits to shareholders
2).Influence the share price
3).Corporate Restructuring
Types:1).Mandatory Corporate Action(ex: its includes stock
splits, mergers, and spinoffs) 2).Voluntary Corporate(it
includes rights issue, making buyback offers to the share
holders while delisting the company from the stock exchange
etc.)
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