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.