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Policy in the listed companies in China Dividend

Author: YuTao From: www.yourpaper.net Posted: 2009-07-09 06:29:59 Read:
Paper Keywords: listed companies dividend influencing factors
Abstract: a reasonable dividend distribution policy is conducive to the listing of the company's shareholding structure stability, sustainable development, to maximize the company's market value. This paper first analyzes the status of the listed company dividends, and then talked about how to develop the appropriate listing of the company's dividend distribution policy.
A dividend distribution of listed companies to adopt
At present, China's listed companies dividend cash dividends and stock dividends (also known as bonus shares, bonus shares) two capital reserve to share capital and surplus reserve, often listed companies as a stock dividend alternatives .

Second, dividend distribution the status quo of China's listed companies
(A) the dividend policy continuity
Dividend policy discontinuity listed companies in the circumstances of its production and operation conditions and operating results without significant changes, irrational drastically adjust its dividend policy.
(B) the listed company retained earnings preferences
1 not allocated more prominent phenomenon
The high rate in recent years, China's listed companies are not allocated. In 1997-1999, this phenomenon peaked three years without allocation ratio of more than 50%. 2000, the SFC issued a refinancing faction now associated oriented policies, the proportion of cash dividends the company has gone up, but does not allocate the phenomenon is still more serious, assigned in 2000 to 2004 and 2015, the average proportion of above 40%.
2 lower proportion of cash dividends
The proportion of listed companies in the form of cash dividends on the company. Allocation of pure cash dividend of listed companies from issuing pure cash dividends on the overall situation in 1992-1993, an average of only 32.72%. Some listed companies in the distribution of cash dividends at the same time, the use of other forms of distribution, such as stock dividends, conversion, together, only 48.28% of the company distributes cash dividends. After 2000, the SFC will assign the dividends of listed companies in particular faction of the present situation as a listed company to refinance a necessary condition for the number of participating enterprises increased, but the added bonus corporate dividend will, the specific performance of the cash low dividend payout rate and a nominal cash dividend enterprises increased.

Moderate dividend policy of listed companies is critical to
Moderate Dividend policy can be summarized as follows: to meet the company profitable investment demand to achieve the lowest financing costs, stable ownership structure, so as to realize the company more substantial increase in the value of the operability dividend policy. Specifically, the listed company Moderate Dividend policy should have the following characteristics: moderate dividend policy goal is to achieve a substantial increase of the value of the company. Meet the the company profitable investment demand, reduce financing costs, shareholding structure and stability are to serve this goal. Manifestations of truth immature for China's capital market, the company's stock value, stock intrinsic value of frequent fluctuations to maximize market value "as a moderate dividend policy target operating unreasonable. The company also listed a moderate dividend distribution policy of maximizing behavior and target the interests of the controlling shareholder.
Fourth, the impact of listed companies dividend policy factors
Listed companies in when formulating a modest dividend policy, the factors to be considered a lot of each factors are likely to affect the policy of reasonable, so companies need to consider the actual situation of the Company not only in policy formulation, but also give full consideration to the following factors.
(A) legal factors
Contractual constraints
When enterprises leverage the creditors in order to prevent the company to pay dividends in the name without permission to reduce the amount of shareholders' capital, increases the risk of creditors, usually contain debt covenants constraint terms of the company's dividend.
Laws and regulations.
Various laws, such as the Company Law and other relevant laws and regulations of the dividend given to certain restrictions. Such as: capital preservation constraint, capital accumulation constraint, profit constraints, solvency constraints, and so on. These constraints for enterprises to develop a reasonable dividend policy has certain limitations.
(B) the liquidity factors
Liquid assets of a company, flush with cash, the dividend payment capacity is also strong, when high dividend policy is of course feasible. But if a company is due to the expansion of production scale or the repayment of the debt has been realizable assets and cash consumption is almost finished, it should not be a high dividend policy. In the normal business, financial managers always try to maintain the ability of a certain amount of cash and realizable marketable securities to cope with unexpected situations.
(C) debt service needs factors
The solvency of the company, the stronger, the stronger the payment of cash dividends ability. Borrowing ability of the company to borrow short-term debt quickly when necessary to repay old debts. In this way, you can cash dividends paid more.
(D) The cost of capital factors
The cost of capital is the corporate dividend policy should be considered an important factor. It mainly includes: stock issuance costs, the issue of new stock issuance costs needs to happen; transaction costs, stock trading need to pay a transaction fee to brokers and institutions. Retained profits raise funds can save this cost, has the advantages of low cost, good for hiding. Thus be considered from the point of view of financial management, and make full use of internal financing through the development of a reasonable dividend policy to raise funds is the best means of financing, you can reduce the cost of financing.
(E) capital demand factors
Capital requirements, dividend distribution is usually lower.
(F) the financial information of the influencing factors.
The majority of investors in the cash dividend change is often seen as an important source of information about the company profitability and operating conditions. The company increased the dividend payments that the company's board of directors and the company management is optimistic about the future of the company, the company's future earnings will increase. Therefore, the shares of the company generally will not dare to change the dividend policy, in order to avoid all kinds of unnecessary speculation.
(7) Shareholders' investment objective factors
Dividend policy will eventually have to be determined by the Board of Directors and approved at the shareholders 'meeting of the Company by the shareholders' investment objectives such as: In order to ensure control over the limit dividend payout; restrict dividend payments for tax avoidance purposes; requirement to pay dividends for stable income and avoid the risk , these policies could affect the final formulation.
The above factors will affect the company's dividend distribution policy, and will affect the company's financial goals, so listed companies in the dividend policy must be combined with the above-mentioned factors, the dividend policy worked out for the company's own development.

References:
[1] Ren Jing. Dividend distribution the status quo of China's listed companies and Cause Analysis [J]. ACCOUNTING (HEAD) .2006 (11).
[2] Huang Rui, Guo Changxin. Dividend policy analysis [J]. Shanxi Radio and Television University .2008 (04).
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