Why do corporate actions get issued?

There are many reasons why corporate actions get issued. However, these two reasons tend to be why corporate actions are issued:

• Redistribution of profits to shareholders through dividends.
• Settling the market price of a stock to make the price more indicative of the company’s worth and/or more attractive to potential investors.
• Stock splits tend to be initiated if the stock value is too high.
• Reverse stock splits tend to be initiated if the value drops too low.

There are of course many more reasons why a company may decide to issue a corporate action. Investors must remember that the reasons stated above are not always the only reasons behind a certain corporate action issued by a company. To better understand the reasons behind a certain corporate action, it is imperative to review all information and news on a company made available to the public.