8. Understanding corporate actions like dividends, bonuses and buybacks

In the previous video, we looked at the settlement process after you buy or sell a stock. When you're holding a stock, during its lifecycle, there are various events that can affect the stock price apart from the market prices. You might have heard of terms like dividends and bonuses, these are called as corporate actions.
In this video, we look at what are corporate actions, the 5 major corporate actions and how they affect a stock.
Check out this Varsity chapter to learn more about corporate actions: zerodha.com/varsity/chapter/f...
If you have any questions, post a comment at the end of the chapter.

[@karan_saluja]

Mistake at 3:19... For 3:1 bonus, you'll get 3 additional shares for every one share you own... So number of shares will be 4 times...

[@peterparker6154]

Thanks I also was confused at beginning

[@virgolani8969]

he said 30 times 3 is 120 😂

[@rollinsjp1]

Wow excellent videos. Really well presented and easy to understand. Thank you so much

[@user-ih2kk7fx5g]

correction at 3:19 ,
3 : 1 means, you get 3 shares over every 1 share
therefore 3x30 + 30 shares (that you already have) = 120
and since the total amount of shares are now 4x the price is divided by 4

[@sriharichills]

than you

[@shreyaworks5912]

What is meant by - When the stock goes ex dividend, the stock price will usually fall to the extent of the dividend paid out

[@ramunenu3793]

Very good presentation❤❤❤❤❤

[@ishan_meets_you]

Watching this video where he said about wipro 21% profit
And
Now(20/7/2022)
I got a notification of wipro profit drops 20%
😂

[@Ayushvadgama]

Can someone explain what is the difference between bonus share and stock split. By the explanation given, its seems that both thing is same

[@bookworld6405]

What I understood is that a bonus share goes from company reserve but a split means existing shares split in value and number. Bonus is basically new shares given to already existing holders for free, split being the existing shares split into whatever number. Did that make sense?

[@l0kesh_a]

​@@bookworld6405 But in both cases your money will stay the same right? Considering there is no change in market value!

[@l0kesh_a]

When issuing a bonus the face value is the same as earlier! When share is split, face value also splits!

[@swingphenom]

hello sir the Ex-dividend date is one day or two days before the record date because on GOOGLE it shows one and you are telling two

[@vedchavan6591]

Key takeaways from this chapter
Corporate actions have an impact on stock prices.
Dividends are a means of rewarding shareholders. The dividend is announced as a percentage of the face value.
If you aspire to get the dividend, you must own the stock before the ex-dividend date.
A bonus issue is a form of the stock dividend. This is the company’s way of rewarding the shareholders with additional shares.
A stock split is done based on the face value. The face value and the stock price change in proportion to the change in face value
A rights issue is how the company raises fresh capital from the existing shareholders. Subscribe to it only if you think it makes sense
Buyback signals a positive outlook of the promoters. This also conveys to the shareholders that the promoters are optimistic about the company’s prospects.

[@ashishrohilla448]

30x3 =90 not 120 in the 1:3 example. Kindly correct.

[@kishan_ideaz_KI.]

30x3 is 90 and 550/3 is 183.333 so the investment value will be 16500 only (calculation error)
In 3:19

[@vivekanandbhamare2138]

Per explanation Bonus & Split seems same. Please guide.

[@madhangopal325]

Bonus means giving extra share to an existing shareholder. Ex: 5:1 means if u have 5 share u will receive 1 extra share.
Split means a share gets divided into 2 or more shares. Ex:1:4 means if u have one share it will divided or seperated as 4 shares. So the price of share decreases.

[@aayushagarwalyt]

@@madhangopal325 yes, the value in bonus share increase whereas in split it remains the same

[@vediclush9137]

@@madhangopal325 wait doesnt it mean you get 3 additional shares for every one share and not the other way around that you just said 5:1 means for every 1 share you get 5 shares = 6

[@suyashgarg0197]

Correction at 1:05
Dividend payout is how much paid out of EPS
In context here, if Face value of RS 2 share paid RS 1 dividend that shall be called dividend only

[@ahuvaebdrasigh322]

30×3 will be 90 not 120.

[@aarav1698]

I was going to post the same "Thirty time 3 is 120 "

[@mailtosomendra]

@@aarav1698 no, but shares you end up is 120, 30 you already had

[@ankush1959]

​@@mailtosomendrari8

[@RationalistIndian]

Yes it is, but here 120 means 30+90

[@divineboutique786]

Exactly.. even i was confused 🫤

[@shereefmtm]

Why company gives bonus share ?There no price change

[@dhruvranga3150]

It’s just additional share being given to the current shareholders.
It’s a sort of company’s reward given to it’s shareholders for investing or keeping faith in the company

[@aravindam4038]

Please make videos in Regional laguages for me
(Kannada) ..its easy to understand for everyone

[@varsitybyzerodha]

Hi Aravindam, we'll look into the possibilities, thanks.

[@user-lp8vh2bu3y]

Asset yogi would have explained in much better and in simpler method

[@sudhirsharan1841]

Please make video in Hindi

[@varsitybyzerodha]

Noted, Sudhir. We'll look into the possibilities.