Company Management And Cash Dividends

Dividends　policy　theory　began　from　the　"dividends　non-correlation　hypothesis"　and　has　been　developed　by　many　scholars.　In　China,　the　study　on　the　dividend　policy　theory　is　different　from　the　study　abroad.　The　appearance　of　the　listed　companies　in　China　is　the　resulted　from　the　transforming　of　plan　economy　to　market　economy,　and　it　is　responsible　for　the　transforming　of　stated　owned　enterprise.　In　order　not　to　shake　the　leading　role　of　public　ownership,　we　introduced　legal　shares　and　the　public　shares　and　the　stated　shares,　which　played　the　special　role.　The　state　shares　played　the　main　role.　In　the　background　of　the　special　system　plus　the　unsound　legal　mechanism　is　affected　to　the　classic　state-owned　companies.Probably,　the　background　of　the　special　system　plus　the　unsound　legal　mechanism　leads　to　the　great　blunder　of　the　company　management　of　the　listed　company.　Based　on　the　study　on　the　case　of　the　high　cash　dividends　of　"guyuelogngshan"　company,　we　have　further　discussion　about　the　relationship　between　the　company　management　and　the　cash　dividends.　In　the　case　study　,　we　utilize　the　modern　financial　management　theory　and　methods　and　find　out　the　high　cash　dividends　does　not　improve　the　company　value　.　The　high　cash　dividends　has　become　the　tools　for　the　bigger　shareholder　to　exploit　the　smaller　shareholder's　interest　and　transfer　the　cash.　We　also　analyze　the　existing　root　of　this　phenomena　.　Firstly,　from　the　review　on　the　documents　about　the　dividends　policy　at　home　and　abroad　,　we　draw　the　different　conclusions　from　abroad,　that　is,　the　market　has　no　response　to　the　cash　dividends.　So　we　need　to　take　into　account　the　problem　of　the　cash　dividends　in　China　from　the　company　management　point　of　view.　Secondly　,　we　analyze　the　effect　of　the　company　management　on　the　dividends　policy　from　the　analysis　on　the　interest-concerned　people　and　the　special　system　background　.　It　points　out　that　the　nature　of　the　cash　dividends　is　the　tool　for　the　bigger　shareholder　to　transfer　the　cash　and　it　does　not　represent　the　interest　of　the　smaller　shareholders.　The　original　reason　is　the　dominating　role　of　the　state　shares　.　Thirdly,　a　brief　introduction　to　the　"guyuelongshan"　company　1.I　will　give　an　introduction　to　the　business　scope　and　the　management.　We　find　out　the　distribution　of　the　smaller　shareholders　is　very　decentralized　.　And　through　the　structure　of　the　board　,　the　monitoring　committee　and　the　top　management　,　we　know　that　the　model　of　the　company　management　is　the　key　person　control.　The　controlling　shareholders　and　the　top　management　has　the　random　right　　This　kind　of　right　leads　to　the　unfair　transaction,　capital　guarantee　and　embezzling　the　cash.　These　behavior　make　the　listed　company　more　risky　2.　An　analysis　of　the　financial　condition　and　the　dividends　policy　and　the　doubts　as　follows:　Firstly,　the　performance　of　"guyuelongshan"　is　so　common.　The　public　shareholders　do　not　show　any　interest　on　the　high　cash　dividends　and　not　accept　this　stock.　Secondly　,　though　the　cash　dividends　from　1998　to　2003　is　very　stable,　the　proportion　of　the　cash　dividends　on　the　free　cash　flow　is　very　unstable.　The　ability　of　making　profits　has　a　declining　tendency.　　Last,　this　company　has　been　keeping　the　high　rate　of　the　dividends　distribution.　On　theory,　the　high　cash　dividends　indicates　the　company　lacks　the　good　investment　opportunity.　At　the　same　time　,　their　own　retained　profits　means　the　lowest　capital　cost.　On　the　stock　market,　this　company　distributed　the　cash　amounting　to　2.5　billion　and　meanwhile　was　financed　0.55　billion　.This　behavior　is　contradictory.　Fourthly,　With　these　doubts,　we　do　the　empirical　study　on　"guyuelongshan".　And　the　main　questions　as　follows:　whether　the　cash　dividends　transfers　any　signal　and　what　signals?　If　the　cash　dividends　policy　can　not　transfer　the　signal　in　favor　of　the　company,　what　is　the　real　reason　for　distributing　the　cash　dividends?　The　empirical　analyzing　methods　as　follows:　1.)　choose　the　data　and　make　sure　of　the　concerned　things　2.)　through　the　fitness　of　the　market　model　of　the　stock　and　 the　introduction　to　the　Bruma　Adjustment　model,　put　forward　 the　practical　solutions.　3.)　calculate　the　super　return　rate　in　the　different　periods...