Module 6 ยท Research and Company Events
Dividends, splits, bonuses and rights issues are corporate actions that change shares or cash.
A corporate action is any event that changes a company's shares or payments - dividends, stock splits, bonus issues, rights issues and buybacks.
A stock split or bonus increases the number of shares but does not change the company's value; the price adjusts proportionally. They can make shares more affordable but create no value by themselves.
A rights issue lets existing shareholders buy new shares, often at a discount, to raise capital. Understand the terms before acting.
Example: Tata Motors
Tata Motors has done stock splits and rights issues over the years. A split changes the share count and price but not the underlying value of your holding.
A stock split:
Why might a company split its stock if it creates no value?