DIVIDENDS
A corporate action is any activity that brings material change to an organization and impacts its stakeholders. These events typically need to ...Read more
FAQS
What are corporate actions?
- • Corporate actions are actions taken by a company that impact the shareholders’ value directly. It is an event that brings material changes to a company and affects its stakeholders.
- • These may be either monetary e.g. dividend, or non-monetary e.g. Bonus, rights, or stock splits.
What are the types of corporate action?
The different types of corporate actions announced by a company are:
- • Rights issue
- • Dividend
- • Stock Split
- • Conversion of debentures into shares
- • Amalgamation
- • Merger
- • Demerger
- • Capital reduction / Consolidation of shares
- • Buy Back
- • Bonus
- • Open Offer
Can I check the Corporate Announcements on the Moneycontrol website?
Yes, you can check the details from the Moneycontrol website. Please follow the below mentioned steps:
- • Visit https://www.moneycontrol.com/markets/corporate-action/
- • Visit a Stock Page, Click on Corporate Action from the Menu.
What is Bonus?
A bonus share is a free share of stock given to current shareholders in a company, based upon the number of shares that the shareholder already owns. While the issue of bonus shares increases the total number of shares issued and owned, it does not change the market capitalization of the company.
What is a dividend?
A dividend can be described as a reward that publicly listed companies extend to their shareholders, and its source is the company’s net profit. Such rewards can either be in the form of cash, cash equivalent, shares, etc. and are mostly paid from the remaining share of profit once essential expenses are met.
What are the types of dividend?
A company may pay a dividend to its shareholders in different forms. Similarly, depending on the frequency of declaration, there are two major types of dividend that shareholders are rewarded with, namely –
- • Special Dividend
- • Preferred Dividend
- • Interim Dividend
- • Final Dividend
- • Cash
- • Assets
- • Stocks
- • Common Stocks
What is meant by stock split?
A company increases the number of shares that are outstanding by issuing more shares to existing shareholders. For example, in a 2-for-1 stock split, every shareholder holding one share is given an additional share. In such a case, the face value of the share is reduced (say from 10 to 5 per share).
Does Stock Split affect the stock price?
Companies’ stock's price is also affected by a stock split. After a split, the stock price of the company reduces since the number of outstanding shares increases, however the market capitalization remains the same.
What is meant by Rights Issue?
When a company wants to raise capital, issue of fresh shares to the existing shareholders is one option available to the company. In such an issue, existing shareholders have the right to buy a specified number of new shares of the company at a specified price within a specified time. Usually, this price is below the market price. The idea is to reward existing shareholders with an investment opportunity, which is perceived to be attractive.
What is the eligibility of the corporate action?
Let us understand the meaning of different important dates for corporate actions:
- • Declaration Date:This is the date on which the board of directors announces to shareholders and the market as a whole that the company will pay a dividend.
- • Ex Date: This is the date on which security trades without the benefit of Corporate Action .An investor buying security on or after the ex-date is not eligible for the Corporate Action by the Company.
- • Record Date:This is the date on which the company looks at its records to see who are the shareholders of the company entitled for the Corporate Action. An investor holding shares on record date will be eligible for the Corporate Action