What is a corporate action in shares investing? How should you respond to a corporate action request?

What Is a Corporate Action?

A corporate action impacts a company and its shareholders. Corporate actions may be mandatory or require a response from its shareholders. Examples of corporate actions are payment of dividends, stock splits, tender offers, and mergers and acquisitions.

There are 4 primary types of shares corporate action which are:

  • conversion request,
  • redemption to cash,
  • dividend reinvestment plan and rights subscription, and
  • acceptance of take over offer.