Study On The Dividend Policy

Dividend policy, as one of central financial problems of listed companies, is subject to much attention from parties. Since 40 years, there has been a great development in west dividend theory and come into being a fairly systematic theory. The study of dividend theory of finance's field of China is very poor because of history.The establishment of Shanghai Securities Exchange at the end of 1990 marked the initial formation of the securities market in China, which supplied a good stage for research on the finance theory, especially the dividend theory. After ten years of development, the dividend theory of China has made certain progress, but this is only a start. Nowadays there are too much speculation and comparatively few mature investors at China's securities market. The investors are unable to fully understand the economic meaning of the formation of dividend. And the investors have low capacity of discernment in the casually-chosen dividend theory by the administers of stock market. All these led to the constant changes of the dividend theory.After reading plenty of literature, the author tries to probe into the distribution of dividends of Chinese listed companies from both theoretical and practical aspects. The author focuses on analyzing China's current situation of dividends' distribution and its cause of formation. The paper also raises some suggestion on how to standardize the dividends' distribution of the listed companies and some methods of formulating the proper policy of dividends' distribution. Through this paper, the author hopes above-mentioned suggestions could contribute to standardize the operation of China's capital market.