Research On Dividend Policy Of Listed Corporation In China

This article is based on dividend theory and reality of Chinese stock market. It did give a brief introduction about fundamental principles of dividend policy; however, it paid more attention on the practice of listed corporations in order to make sure that those principles can be testified by reality.The first tow parts of this article gave introduction and comments on dividend distribution and different dividend policies, in other words, it gave general impress on dividend distribution. Then the article analyzed condition and trend of listed corporations in China, stressing on the recent three years.Part three reviewed development of western dividend theory and analyzed the relationship between dividend policy and corporation's performance, the conclusion would be that dividend distribution, especially in cash, will contribute to the corporation value.Then the article studied mechanism through which dividend policy influence corporation value from two aspects-financing strategy and share structure. What it found was listed corporations in China prefer share financing. Many listed corporations acquire allotment qualification by adjusting profit, including distribute cash dividend to shrink profit rate of companies' net assets. Also, state-shareholder and prefer cash dividend, however, floating stock shareholder would like to have share dividend. Considering major shareholders' dominate position given by the present highly concentrate system, major shareholders can easily take advantage in choosing dividend distribution methods.At the end of this article, the author made some proposals to improve present condition, including not only dividend distribution scheme, but also protection of minor shareholders and function of share repurchase in making share structure sophisticated .The last but not the least, though share structure is very important, to build up culture and moral foundation under market economy is our most urgent task.