Frequently Asked Questions

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Corporate Actions
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Corporate Actions
What is a Corporate Action?

A corporate action is an activity that brings material change to an organization, impacting its stakeholders, including bondholders, as well as shareholders, both preferred and common. These actions are generally approved by the company’s board of directors, in some cases, shareholders may be permitted to vote on some events as well.

 

Common Corporate Actions

Dividends

A dividend is a corporate action that alters a company’s stock price. Dividends may be in form of cash or stock. Is subject to approval by a company’s board of directors and is a distribution of a company’s earnings to a specified class of shareholders.

Stock Split

A stock split is a common corporate action that alters a company’s existing shares. In a stock split, the number of outstanding shares increases by a specified multiple, decreasing the stocks par value. The market value of the total number of shares remains the same.

Reverse Split

A reverse split is a common corporate action that alters a company’s existing shares. In a reverse split, the number of outstanding shares is reduced by a specific multiple, increasing the stocks par value. The market value of the total number of shares remains the same.

Merges and Acquisitions (M&A)

Mergers and acquisitions (M&A) is another corporate action that brings material changes to companies. In a merger, two or more companies come together to form a new company. The existing shareholders of merging companies keep a shared interest in the new company. Contrary to a merger, an acquisition is a transaction in which a company, the acquirer, takes over another company, the target company. The target company ceases to exist, and the acquirer assumes the target business. The acquirer company stock continues to be traded.

Spin-off

Is a type of divestiture where a parent company sells all of the shares of a subsidiary or distributes new shares of a company or a division it owns to create a new company.

How Folionet handles Corporate Actions?

The board of directors of the issuing company determines the terms and conditions of corporate actions.

Dividends, stock splits, reverse splits, mergers, acquisitions and spin-off are processed by our clearing partner, Apex. All the adjustments will be made to your portfolio in a timely manner.

Keep in mind that sometimes certain stocks will be restricted from trading, while the Corporate Actions team work to process these changes.

 

Dividends

Dividends

A dividend is a corporate action that alters a company’s stock price. Dividends may be in form of cash or stock. Is subject to approval by a company’s board of directors and is a distribution of a company’s earnings to a specified class of shareholders.

Where can I find my dividends?

Please contact our support team and request your monthly statements at support@folionet.com.

How Folionet Processes Dividends?

Our clearing firm - Apex Clearing automatically process your dividends. Cash dividends will be credited as cash to your account by default. Currently, we do not support dividend reinvestments in the issuing security. 

 

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