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Dividend policy of listed companies tradable share reform

Author: XuXiaoYing From: www.yourpaper.net Posted: 2010-04-10 17:49:20 Read:
Dividend policy is one of the three decisions of the company's financial management, which determines the flow to investors and retained in the number of companies in order to reinvest funds, and also be able to pass on the results of operations of the company to investors. Dividend policy, including the choice of dividend policy, the dividend payout ratio and the dividend payment, making the basic content. Between the listed companies in China because China has been split share price "split" and "the interests of the split, serious acts of short-term dividend policy, arbitrariness larger, neglect dividend policy and corporate sustainable development relationship. The end of 2006, China's split share structure problem has basically been resolved, and issued a series of policies and regulations designed to improve the governance structure of listed companies and the protection of small investors. In this context, our dividend policy of listed companies in 2006, statistical analysis, and summarizes several of the following characteristics.

Second, the split share structure reform, the dividend policy analysis
1. The form of dividend cash dividends the dividend distribution mainly in the form of cash dividends and stock dividends, stock dividends countries listed companies in the West is just a bonus issue of this form there conversed, stock dividends of listed companies in China in addition to the bonus issue. Before 2000, the dividend policy of listed companies in China mainly to stock dividends, cash dividends the company a very small proportion. Cash dividends since 2000 the proportion of listed companies increased substantially, and has remained at about 50%. (Figure 1)

Cash dividends in the form of dividend distribution in 2006 continued to hold a dominant position. Statistics 1409 listed companies, a total of 730 listed companies proposed dividend distribution plan (as shown in Table 1)

51.8l%, of the total number of statistics, a 4.87% increase over 2005. A total of 686 listed companies to distribute cash dividend (including cash dividends and stock dividends), accounting for 94% of the all dividend distribution company, which only distribute cash dividends to 551, accounting for all dividends divided into 75 unitary has. 5%, compared to 2005 increased by 5.65%; 135 simultaneous distribution of cash dividends and stock dividends, accounting for 18.5% of all dividend distribution. Only to take stock dividend, a total of 44, accounting for 6% of all dividend distribution. Which, only the bonus issue of 14, 3 bonus issue and conversed only 27 Zhuanzeng.
2. Overall level of cash dividends of listed companies did not substantially increase with the substantial increase of the company's profitability in 2006, to achieve a substantial increase in China's rapid economic development and institutional reform of the capital markets, driven by the performance of listed companies, in 2006 the average per share surplus of 0.17 yuan, 2 times more than 2005's 0.05 cash dividend to investors, but the listed companies in 2006 has not been accompanied by a substantial increase in the view from the average dividend per share 2006 per share dividends to 0.075 than 2005 (0.o66), only 19% (see Table 2).

This is the same proportion with the increase in average operating cash flows of the listed companies. Listed company's average operating cash flow in 2006 to 0.4 million, 19% higher than 2005's 0.36. This shows that the cash dividend is a direct outflow of cash, which depends not only on the profitability of the company, and also depends on the company's cash flow. Although the overall profits of listed companies increased cash dividend capacity is not followed by a substantial increase in raising the level of the dividends of listed companies, which to some extent limit.
3. Newly listed companies in the equity division reform dividend rate of equity division reform to implement the new from the old, that shares changed after the initial public offering of the company, its shares no longer distinguish between tradable shares and non-tradable shares, all shares to implement conditional full circulation. Statistical sample, a total of 70 new companies listed in the stock reform, among the 65 proposed dividend distribution plan, accounting for 92.86%, of which there are 62 listed companies pay cash dividends per share dividend 0. $ 14, nearly two times higher than the overall average (0.075) (Table 3, Table 4).
large number of empirical studies have shown that, when the company declared dividends for the first time (initial dividend payment) or increase the dividend, the secondary market will respond positively; When the company lower dividends or cancel the dividend, the market react negatively. Market effects in the declaration of dividends is also very obvious, such as Chen Xiao, Chen Xiaoyue and Ni Fan (1998) to select a sample of companies pay dividends for the first time in 86 listed before 1995. That the first payment of the dividend announcement can lead to excess returns greater than 0; Weygand (1998), the test results show that in the five trading days before and after the announcement, the allocation of the average excess return on dividends significantly higher than that assigned companies, be interpreted in the distribution plan average excess return rate significantly higher than the companies do not explain. Yu Qiao, Cheng Ying (2001) 1992-2000 dividend announcement stock price and trading volume of detailed study, they found, whether it is the first time the dividend or the general annual dividend, stock price and trading volume have made significant reaction, but the latter is more sustainable. Newly listed companies to implement high dividends after the split share structure reform, more value should be the market effect of the dividend policy, future performance and growth of information communicated to the market, driven by the rise in stock prices of listed companies want to pay high dividend. Because the full circulation so that the stock price does not exist between the size of shareholders' interests split "the interests of the major shareholders with stock prices are closely related.
4. Dividend payment "abnormal" high camp to reduce dividend payments a company of its decision that there are many factors, and there is no single measure of. According to the theory of residual dividend policy, the company used to remuneration shall be paid to the shareholders of a residual cash flow, cash dividend per share is greater than the per share in operating cash flow, the cash gap, will promote its use of the funds of the previous year accumulation or re-raise funds to make up. If the cash balance of the previous year to make up, it will reduce the owner's equity and increase its debt ratio; the issue of new shares to offset the excess dividends, so companies have to bear the cost of issuance of new shares; borrowing to make up the funding gap, improve the company's debt ratio, increasing financial pressure, the value of the company does not comply with the principle of maximizing, so if the dividends per share listed companies is still greater than the earnings per share, cash flows or dividends per share greater than dividends, we call send current as high as "abnormal". From Table 5

We can be seen in this 2006 "exception" high to send the current significantly reduced the proportion of the total cash dividends. This may be due to the split share structure reform, the original "Price split" and "the interests of the split after the problem is resolved. Major shareholders and the interests of minority shareholders consistent dividend policy, the more consideration to the development needs of the enterprise, as well as the secondary market price performance of the listed companies to reduce the motivation of the largest shareholder interests by High Cash Dividends occupation.
5. Dividend "sticky" characteristics are not significant. The company's dividend policy has a "sticky" features, the company generally does not often change in its dividend policy, the Western capital markets, empirical studies show that, in most years, the number of the company does not change its dividend far more than the number of the company to change its dividend. Companies to change the dividend, the number of companies increased dividend is five times the number of companies reducing dividends. Listed company dividends changed in 2006 to 595, accounting for 82% of the distribution of dividends, the dividend payment increased to 401, accounting for 55% of the number distribution of dividends, the dividend reduced to 194, the number of share of distribution of dividends 27%; dividend unchanged only 135, representing 18% of the company's dividend distribution, thus see that, "sticky" features of our dividend policy is not significant, indicating that China's listed companies dividend policy discretion The larger dividend policy was not significantly related to the previous period.
Third, the conclusions and recommendations
As can be seen from the above analysis, the dividend policy of listed companies in 2006 has continued the dividend distribution characteristics of the previous year, cash dividends as a major distribution methods, but the level of dividends and not significantly enhance the performance of listed companies, with the 2006 increase; Although the "exception" to send the current is decreased, but less stable dividend characteristics still exist, maintain a dividend policy of continuity and stability, not only contribute to the sustainable development of listed companies, but also conducive to the protection of medium and small investors interests. In this paper, the characteristics of the 2006 dividend policy following recommendations:
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