What is a Corporate Action?
There are several definitions of Corporate Actions:
Corporate Actions are events called by the issuer of securities (equity or debt) that affects the security and the holder of the security.
An action taken by a company that causes a material change in structure. The change can relate to for example name, price, shares, capitalization etc.
A process initiated by a publicly traded company that will bring change to its stock (equity and debt).
To define Corporate Actions more indepth there are several viewpoints to look from:
There are three main types of Corporate Actions:
Mandatory Corporate Actions
The event is mandatory for the shareholder, meaning that they have no choice in whether to participate when the issuer calls for it. A shareholder does not have to do anything in a Mandatory Corporate Action. Mandatory Corporate Actions are often subject to shareholder's approval at the AGM though.
Voluntary Corporate Actions
Mandatory Corporate Actions with Options