What do you need to know about corporate actions?

What you need to know about corporate actions... Corporate actions are usually agreed by a company’s board of directors and authorised by the shareholders. Dividends, stock splits, acquisitions and spin-offs are all common examples of corporate actions.

Who approves corporate actions?

Corporate actions must often be approved by a company's shareholders and board of directors. Corporate actions include stock splits, dividends, mergers and acquisitions, rights issues and spin-offs. All of these are major decisions that typically need to be approved by the company's board of directors and authorized by its shareholders.

How does a corporate action affect a company's stock?

If you're a shareholder or considering buying shares of a company, you need to understand how an action will affect the company's stock. A corporate action can also tell you a great deal about a company's financial health and its short-term future.

What is a mandatory corporate action?

Mandatory corporate action: A mandatory corporate action is an event initiated by the board of directors of the corporation that affects all shareholders. Participation of shareholders are mandatory for these corporate actions. An example of a mandatory corporate action is cash dividend. A shareholder does not need to act to receive the dividend.