Issues Of Dividend Distribution In Chinese Listed Companies

Dividend distribution is one of core contents of financial management in modern companies. Dividend distribution policy is the basic policy and tactics of allocation profit surplus, with aim at maximizing shareholder's interests. The policy and tactics are based on long-term development of companies and the interests of shareholders inside and outside company. Appropriate dividend distribution policy can not only set up good company reputation, but also arouse enthusiasm of many investors thus making companies acquire long and stable development opportunities and conditions. Western countries conducted research into dividend policy in 1950's and have made great achievement after 50 years' study which offers great help to companies' financial management and government's constituting relative rule and law. With the development of stock market, More and more listed companies come forth and their dividend distribution policies are quite different from each other. On the whole, because of imperfect stock market in China, dividend distribution is very unsteady and random, also it doesn't follow the objective of maximizing shareholder's interests. The inappropriate dividend distribution has damaged the investor' rights of gaining dividend, and restricted the long-term development of listed companies, and also is unfavorable to the normal development of stock marker. So it is urgent to standardize dividend distribution.This thesis is divided into six chapters to discuss the issues of dividend distribution.The chapter one first introduces several views on the western traditional and modern dividend theories according to whether dividend influences the market value of company: dividend indifference theory, bird-in-one-hand theory and taxation difference theory. Then according to how dividend influences the market value of company, it illustrates signal transfer theory, agency cost theory and clientele effect theory. Based on the research results on the western dividend theory, the dissertation summarizes the enlightenment on China and looks on them as the direction of standardizing dividend distribution.The chapter two analyzes the quota status of dividend policies in Chinese listed companies, shareholders and government department under the present rules and regulations. For example, listed companies begin to pay attention to repayment to shareholders; companies with good performance insist on long and steady dividend policy; the shareholder and government departments think highly of paying out cash dividend.Chapter three analyzes the problems of dividend distribution existing in Chinese listed companies, including the popularity of no-dividend -distribution phenomenon; the low cash dividend-payout ratio wholly and unrationally high cash dividend-payout; stock dividend still being an important form of dividend distribution and the short-term action of dividend distribution being serious. Summarized up are the following four problems: unstability as a whole in dividend distribution, not abiding by the objective of maximizing shareholder's interests; impure motive in distributing dividend and no attention to minority stockholder's interests.In chapter four, it probes into the causes that bring about the problems of dividend distribution in Chinese listed companies. In my opinion, because of imperfect stock market and immature behavior of listed companies, the causes are: the lack of relevant theory in dividend decision; poor profit earning ability; peculiar ownership form of share-hold capital; unrational share ownership structure; undesirable motives in dividend distribution; lag of laws and regulations related to dividend distribution.Chapter five discusses the theoretical foundation, necessity and possibility of regulating dividend distribution. It analyzes in terms of property rights theory that stockholders in listed companies have residual claims as ultimate owners. Because of unreasonable allocation between residual claims and residual control in assigning ownership in listed companies, the ultimat...