A Study on Impact of Corporate Actions on Share Price Movements

Abstract: Every day we are experiencing changes in price of shares in the stock markets. the changes are attributed to several factors. one of the core factors that contribute to the change in share price is the corporate actions of companies. the corporate activities can affect up to the shareholders. Investors may suppose that the corporate behaves either in positive way or negative way based on corporate acts, investors form an opinion about the future performance of the companies. based on this opinion, investors purchase or sell securities. The companies undertake distributions of dividend interest, issue of rights/ bonus shares, issue of fresh securities by issuers, splits etc. These are referred to as corporate actions. corporate actions are essential to all companies. The study considers the rights issue and the dividend announcement of 8 companies and its effect and the significance on the stock prices and the dividend amount announced by the companies.

Keywords: Corporate Action, Share Price Movements Dividend Announcements Rights Issues, Stock Market Reactions, Investor Behavior Abnormal Returns, Trading Volume, Financial Performance, Bonus Shares.