A corporate action is a change in a company that affects its shareholders. Corporate actions can range from urgent financial matters, such as bankruptcy, to a company changing its name.
Corporate actions include:
- Stock splits
- Dividend payments
- Mergers and acquisitions
- Rights issues
- Spin-offs
- Tender offers
- Scrip dividend
In most cases, shareholders can vote on the corporate action in advance at a shareholder meeting. In other cases, the corporate action is approved by the board of directors of the company.
Corporate actions can be either mandatory or voluntary.
Mandatory corporate actions are processed automatically, while voluntary corporate actions give investors a choice to participate. In some cases, there can be a mandatory corporate action with a choice (mandatory with choice). Examples of mandatory corporate actions include stock splits, mergers, and companies changing their name. Examples of voluntary corporate actions include tender offers, scrip dividend and rights issues.
Corporate actions can have a major impact on the financial instrument concerned and are therefore announced on the Investor Relations page of the company. If you want to be informed of Corporate actions, be sure to take a look at this company page.