• Corporate Actions

    Corporate Action is a process initiated by a publicly traded or listed Company that brings material change to the company affecting all the shareholders which include change in its Name, Securities, strike price etc. Corporate Actions are approved by company’s board of directors and authorized by shareholders.

    Different types of Corporate Actions:

    • Mandatory Corporate Actions
    • Voluntary Corporate Actions
    • Mandatory with option choice Corporate Actions

    Mandatory Corporate Action:

    When a Corporate action is initiated by board of directors of the firm which effects all shareholders and their approval is mandatory.

    Voluntary Corporate Action:

    When a corporate action does not necessarily impact all the shareholders and they can opt for it based on their choice. Voluntary term comes as it gives shareholders the option to either go for it or ignore the same. Some of them are:

    • Tender Offer
    • Dividends Reinvestment Plan (DRIP)
    • Dutch auction
    • Rights Auction
    • Repurchase offer
    • Rights Issue

    Mandatory with option choice Corporate Action:

    This is a corporate action where shareholders are given a choice to choose any case among different available options. If they don’t choose any option, then default is applied. Key of them are below:

    • Cash Stock Options
    • Mergers with elections
    • Spin-off with elections
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