Corporate Actions and Stock Market Basics

Study Notes

A capital increase is when a company increases its share capital by issuing new shares or increasing the nominal value of existing shares.
Reasons for a capital increase include integrating new partners, financing activity, developing new branches, and improving financial situation.
Shareholders can participate in a capital increase through preferential subscription rights or by negotiating and transferring those rights.
Stock prices are determined by supply and demand, public perception, news, and company performance.
The stock market is not a single place but an assembly of financial centers.
The order book shows buy and sell orders for a particular security.
The price earning ratio (PER) allows investors to assess the high cost of a share.
Corporate actions include events such as dividends, stock consolidation, and mergers.
Security holders may have options or choices during mandatory corporate actions.
Banks and brokers provide the interface for processing corporate actions.
Corporate actions are events that affect shareholders of a company
There are different types of corporate actions, including distribution and reorganization actions
Takeover bids, OPE, OPR, and OPV are examples of corporate actions
Dividends are payments made by a company to its shareholders as income
The allocation and amount of dividends are decided by the Board of Directors and the General Meeting of Shareholders
Dividends can be paid in cash or by allotment of shares
The payout ratio is the ratio between the dividends paid and the profits of the company
The payment of dividends can affect the share price of a company
Ex-dividend is the reduction in the amount of the dividend per share before it is paid to shareholders
The adjusted closing price takes into account the payment of dividends.