Glossary entry
A corporate action is an event initiated by a company that changes shareholders' securities, rights, or cash entitlements. Examples include dividends, stock splits, mergers, and rights issues. Some events occur automatically, while others require an investor election. Key dates and intermediary procedures determine eligibility and how holdings or related derivatives are adjusted.
Illustrative example
In a two-for-one stock split, 10 shares become 20 and the reference price adjusts proportionally. The split alone does not double economic value.
What to consider
Read the event notice and election deadline. Tax treatment, fractional shares, and derivative adjustments can differ from the treatment of ordinary shares.
General information, not a personal recommendation. Product availability, rights, and obligations are determined by the relevant provider, jurisdiction, and approved agreements.