Corporate Actions in the Stock Market ?

what is dividend cash-rich companies which do not have adequate opportunity to deploy cash in lucrative business return a portion of the cash to its stockholders so any company which has a lot of cash and they do not know where to put that cash they decide to give a portion of that cash to it stockholders in the form of dividends.

So most often the dividends are paid out of the profits though it is not necessary dividends are announced periodically normally at twice in a year or once in a year generally high-growth companies do not pay much dividend while stable cash-generating businesses do to be eligible to receive dividend one should own the stock on the record date now what a stock split now it is a scenario when a company announces that it is splitting the face value of its shares thus if the face value of rupees 10.

And the company announces one is to five stock split the new share will have the face value of rupees – that means rupees ten shares has been divided into five equal parts so the value of one share becomes rupees two the stockholder receives five stock for each stock that you own the market price of the stock falls.

But the market capitalization of the company does not change meaningfully what is bonus issue now these are free shares that des stockholders of the company received against the shares that they already own bonus shares are issued to the reserves and the shareholders fund companiesannounce a ratio by which new shares are allotted to the existing stake holders if the ratio is threes to one the stockholder receives three shares for each share held now what is buyback a company can offer to buy back its shares from the existing stock holders either because it thinks the share price is too low or because it has surplus capital that it cannot put to good use that it plans to return to the shareholders buyback reduced the number of shares in the issue and lead to increase in the earning per share now what is the right issue now in this a company offers new shares to the existing shareholders in the stock of the holding I’m sorry in the ratio of the holding in the company shareholders are offered new shares at a discount to encourage them to apply in the issue this is the primary show in which the money paid by the shareholders accrues to the company threes to one right issue indicates that the stockholder can buy one share for every three shares that he owns in the company so if I already have a share with SBA and if SBA gives me the right issue with one share of my existing I can buy three new shares so it’s a profitable venture for the stockholder and a confidence-building measure of the institution so I hope this video would have given you a lot of valuable information and would have informed you about this great option which is called corporate action in the stock market thank you.