Corporate Actions

Corporate action is a set of transactions performed by a company that, when performed, have a direct impact on the financial assets of the organization. In other words, corporate actions can be called any events in the life of a company that in one way or another affect the company itself, as well as persons associated with this company, in particular, shareholders and bondholders. At their core, corporate actions fall into three categories:

• Mandatory - persons associated with the company do not actually have a choice regarding their participation in these events, since their execution is mandatory. For example, the payment of dividends.

• Mandatory with conditions - as in the first case, persons associated with the company will have to participate in their implementation, but in this case, they are given the opportunity to choose a specific course of action from several possible options. For example, the shareholders of a company can choose whether to receive dividends in cash or shares of the company.

• Voluntary - in this case, each person associated with the company has the right to independently decide whether he will take part in this corporate action. For example, a company may offer to buyback its shares from current shareholders, which will ultimately reduce the number of shares outstanding and increase earnings per share.