Cash Dividends And Medium-Small Investors Interest Protection

From establishing in 1990, our stock market has made enormous contribution to the developing of our national economy. But, as one of principal parts, medium and small investors haven't shared this advantage. On the one hand, they bear high risk; on the other hand, they can't obtain corresponding high revenue.There are two sources for these investors to obtain revenues: one is capital gains from price differences by stock buying and selling; another is dividends from company profit distributions. In our country, most of list companies haven't steady dividend policies, so these medium and small investors can obtain revenues only through stock jobbing in second market. However, the stock prices fluctuate unsteadily, and declined step by step these years, the investors not only can't obtain revenue but also paid huge stamp taxes and commissions. Moreover, there are so many behaviors in stock market that injured the benefits of investors, such as inveracious financial information, unfair associated deals, and huge impropriate funds, and large-scale dividends distributing on behalf of majority stockholders and controlling stockholders. All these do huge damage to medium and small investors.Starting from the attention to medium and small investors' protection, I select cash dividend and medium-small investors' interest protection as my thesis.Cash dividend reflects the real operation result and company's ability to achieve profit. And cash dividend is one of important sources for investors to obtain revenue. Compared with capital gain and stock dividend, cash dividend has the characters of low-risk and steady. Only when dividend incomes coming from the list companies' profit distributions account for a remarkable proportion in the total amount of circulating stockholders' equity investments, the investors could have the ability to resist the violent shock of the stock market, and long-term financing funds could enter into stock market, and long-term investments could become the mainstream in the stock market.On the foundation of concepts explaining of investors, investors' interests protection and the purport of investors' interests protection, this thesis studiesthe relationship between cash dividend and medium-small investors' interests protection from two respects: First, the firms' financing targets are maximizing shareholders' value as could as possible. That is to say, only when remaining profits could generate the same or higher value than shareholders could get from their own investments, the profit could remain in the companies. Second, agency theory. That is to say, the payment of cash dividend can reduce agency cost, because it has reduced the capital resources that managers and insiders could work for their own private interests. Moreover, the payment of cash dividend makes the company have to get to the capital market to financing constantly, thus have to accept more external supervision and restraint. Also, this thesis analysis outcome model and substitute model establishing by La Porta, and suggests that cash dividend can be as the substitute for medium-small investors' interests' protection.On the basis of theoretical research, this thesis has carried on real example analysis to behaviors of cash dividend distributions of list companies and medium-small investors' income state from 1994 to 2004. The reasons of erratically cash dividends distributions also have been analyzed.From 2000 to 2004, regulators declared mandatory dividend policy: cash dividend will be a restrict condition for refinancing. Here I analysis the function of mandatory dividend policy, and present my own view on this question. Moreover, this thesis attempts to establish a system to force the list companies distributing their profits: they must distribute a certain percentage of profit as cash dividends to investors; if they hide their profits, they maybe haven't the qualification of refinancing.The medium and small investors are real "backbones" of our security market. Protections of medium and small investors have a long way to go. Hope th...