A Case Study On The Rationality Of Fuyao Company’s High Cash Dividend Policy

Dividend policy is always a core point in financial management.And there are many arguments about dividend policy.Among different Dividend policy,cash dividend is receives much concern.This article aims Fuyao company as the research object,which is selects in the wind industry,classification for auto parts.The company began to the high ratio of share out bonus from 2010 to 2015 with rate of 50% to 70% and cash dividend per share(pre-tax)in 0.6 Yuan to 0.7 Yuan,.Comparable companies in the same industry,Fuyao company with the high dividend payment rate and high cash per share is more prominent.The purpose of this study is trying to integrate dividend policy with rationality.On how to quantify the rationality of the dividend policy standard,how to consider important factors affecting the balance,so as to decide whether to adopt high cash dividend.Based on this analysis,this paper gives a case revelation.Firstly,this paper summarizes the dividend distribution of a-share market in recent years and expounds the significance of the research in this paper.At the same time,the present situation of domestic and foreign research on dividend policy is summarized.In this paper,the paper discusses the ideas and methods,innovation points and shortcomings of this paper.And this paper gives a definition of rationality and high cash dividend.Secondly,this paper introduces the research object,introduces the basic situation of the research object,the development environment of relevant industry and the present situation of the research object’s own dividend policy.Thirdly,this paper focuses on the main factors influencing the high cash dividend and defines the standard of the rationality of every factors.The selection of representative factors includes financial conditions(mainly is the debt paying ability,operation ability and profitability),investment and financing situation and the company life cycle and equity structure.The paper then uses the index weighted quantification statement to integrate each key factor,and finally the rationality of this paper is given.Finally,based on the analysis of the text,the author’s own case inspiration is presented.From the enterprise perspective,the rigorous planning,good management ability,frequent debt financing,cash flow is to measure whether cash dividend policy is rational.From external reporting users,the big shareholder is indeed the biggest winner,but it can’t be seen as damaging the benefits of the minority shareholders.Finally,from the government’s point of view,it is helpful for enterprises to plan the dividends if the explicit policy is issued.