Corporate Actions is an event declared by some compnay in the market that affects the shareholders.These are the events that are declared for the benefits of the shareholders,changing the price of shares and for the restructuring of the corporates.Some examples of corporate actions are Bonus issue,stock splits,dividends,rights issue etc.
Corporate actions are basically classified into three types:
1)Mandatory Events
2)Voluntary Events
3)Mandatory with choice
Mandatory Event:The event in which the all the holder of the securities are automatically impacted i,e. the holders donot need to respond to the event.For ex.Cash dividend or Bonus issue are mandatory events as the holders will get the dividend or bonus automatically.
Voluntary Event:The event in which the holder has the option to participate in the event or not.In such type of events sometimes the holder has also the options the choose .For ex:Dividend option in which the holder can choose the option of cash or stock dividend.Tender offer is another example of voluntary event in which the holder has the option to respose to it or not.
Mandatory Event With Choice:This type of event give the holder choice to responsed to the available options otherwise the default option is applied.
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