What is a corporate action?

A corporate action is any activity that brings material change to an organization and impacts its stakeholders. These events typically need to be approved by the company's board of directors. Corporate actions can be either voluntary, when investors choose to participate, or mandatory, when participation is obligatory.

What are the different types of corporate actions?

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. A cash dividend is a common corporate action that alters a company's stock price.

Who initiates a corporate action?

A corporate action is initiated by the board of directors and approved by the company’s shareholders. Dividends are portions of profits made by the company, which are distributed to the company’s shareholders. Dividends are paid on a per-share basis.