Significant corporate actions are dividend, bonus shares, right issue, stock split & buyback of shares.

1. Dividend: Dividend is a reward or cash that a company gives to its shareholders. It is some part of the profits that the company shares with the shareholders. It is calculated either on a per-share basis or as a % of face value. The share price increases when the company declares a dividend as the share becomes attractive for the investors. Once the dividend is declared, the price drops down as investors refuse to pay the premium price for the share as the dividend is already paid & the price is the ex- dividend (does not include the dividend)

2. Bonus shares: Bonus shares means the free shares issued by the company to its shareholders as on the particular date.The price of the shares increases before the bonus as company is issuing free shares.Once the bonus shares are issued then the price of the share automatically comes down.Let’s understand this with an example – the share price of the company before bonus id ₹5,000 & company is issuing 5 bonus shares for 1 share held.That means now the you will hold 5 shares of ₹1,000 each. This means that the totalvalue of shares remains intact but the per share value declines. Generally company issues bonus shares to make the shares affordable for investors.

3. Right issue: A right issue is an invitation to existing shareholders to purchase the new shares issued by the company at discounted rate. Here the benefit existing shareholders can get the shares at lesser price than the market price.After the issue of right issue, the price falls as there are more shares floating in the market i.e.the supply of the shares exceeds demand resulting into fall in share price.

4. Stock split: The stock split works in similarlines with bonus issue.The number of shares held by the shareholder increases but the total value of investment remains the same. For example, if the company declares 1:2 stock split & you hold 50 shares & face value is ₹10, the number of shares hled by you after split will be 100 & face value will be ₹5. After the split, the share prices fall as now there are more number os shares availabl ein the market.