Which corporate action is voluntary, requiring the stakeholder to make a decision (for example a takeover bid)?

• A. Dividend payment
• B. Takeover bid
• C. Rights issue
• D. Scrip issue

Answer: (B)

The key idea is that a voluntary corporate action is one where those affected must actively decide whether to participate. A takeover bid best illustrates this: a buyer offers to purchase the target’s shares at a premium, and each shareholder must decide whether to tender their shares and accept the offer or refuse. That decision is entirely up to the shareholder, making the action voluntary.

Dividend payments are decided by the board; shareholders don’t choose to accept or reject a dividend, so it’s not about a voluntary decision in the same way. Rights issues and scrip issues also involve choices for investors (whether to exercise rights or take shares instead of cash), but the takeover bid is the clearest and most directly about a voluntary decision by stakeholders to accept or reject the offer.