What is a corporate action?

A corporate action is an event initiated by a public company that affects its shareholders and the company's outstanding securities. These actions can be mandatory or voluntary.

What are common types of corporate actions?

Common types include dividends (cash or stock), stock splits, reverse stock splits, mergers, acquisitions, spin-offs, rights issues, and tender offers.

Why are corporate actions important for investors?

Corporate actions can significantly impact the value of an investor's holdings, their voting rights, and the overall structure of their investment portfolio, requiring careful consideration.

How do mandatory and voluntary corporate actions differ?

Mandatory actions (e.g., stock splits, cash dividends) require no shareholder decision. Voluntary actions (e.g., tender offers, rights issues) require shareholders to make a choice or elect an option.