CORPORATE ACTIONS

Corporate Action (CA) is that decision or event of a firm that bring material change to Equity, Debt or other forms of security issued by a public company. When a listed company announces its intention of a CA, it means that, it is going to bring some structural change to its security which may affect in terms of number of units and value. For shareholders it is imperative to understand these different types of CA's and its implications on the security prices and in turn its probable impact on their investments. For instance, when a firm announces bonus shares, the number stock held by each shareholder in the market are going increase by its bonus ratio. Most crucially events of financial implication signal stakeholder dominantly about possible impact on their holding value. For instance, firms periodically release information pertaining to its financial performance. It indicates the profits or loss suffered by the firm and the dividends that can be expected. It could be some board decisions on key issues or events has a direct or indirect influence on share value. By analyzing the corporate actions an investor take better decisions on wealth creation.

Auteur

Suresha, B is a Professor with more than 20 years of experience in teaching and research in securities market, corporate finance, accounting and risk management. He is currently working as an associate professor at School of Business and Management, CHRIST (Deemed to be University).