WIPRO LTD.

Corporate actio
Corporate action
Corporate actions are taken by the board of directors of a company.
These are then approved by its shareholders. These actions have a
bearing on the assets of the company. Corporate actions include
changing the name or brand of a company, issuing dividends, spinoffs,
mergers and acquisitions etc
Dividend corporate action

Dividends are paid by the company to its shareholders. These are paid to distribute profits made by
the company during the year. The company pays dividends on the basis of per share.
Bonus issue corporate action
These are the shares that a company offers to its shareholders as a gift. Here a rule applies of 1:1
bonus issue. Further meaning is that the shareholders get one additional share for each share that
they are already holding. Normally, when a company confronts liquidity issues or is not in a
position to distribute the dividends, then they tend to issue bonus shares out of its profits or
reserves.
Impact of corporate action on shareholders
value
• corporate actions impact value of ownership in the following two
ways –
• Benefits – corporate action results in an increase in the position
holder’s securities or cash position, without altering the underlying
security. In bonus issue, receive additional shares in proportion to
holdings.
• Reorganizations –corporate action reshapes or restructures
underlying securities position, that may sometimes result in a cash
payout. As equity restructures, conversions, and subscriptions.
 Impact of the corporate action on the
market value of share price of the
company
• Companies declaring dividend pay-outs annually , often gain the
confidence of investors, as they believe that the business is
performing well, and poses as a reliable investment venture. As a
result, the share price of companies is often high in the market,
owing to its high-demand among risk-averse individuals, looking for
stable investment ventures.
Thank you