An Empirical Study On Dividend Policy Of China's Listed Companies

Stock dividend is listed company's rewards to its investors, and it is a signal of listed company's future to its investors, basing on listed company' s prediction of itself. An appropriate dividend policy can not only set up a good image for a company, but also inspire the investors to continuously invest in the company, which enables the company to obtain a long-term and steady developing condition and opportunity. By using western dividend theories for references, this article aims to explore the actual situation and factors of the dividend policies practiced by Chinese listed companies. The article is also expected to put forward some suggestions for dividend policy of listed companies in China.This article is divided into five chapters.Chapter one is an outline of the dividend policy. It presents the definition of dividend policy and explains the importance of the rational dividend policy. On the basis of this, it reviews the representative figures, views of western main dividend theories as well as the relations between them.Chapter two describes and analyses the actual situation, characteristics and causes of formation of dividend policy practiced by Chinese listed companies at length.With the method of demonstration, Chapter three finds that there is signaling hypothesis in China's capital market, and dividend policy can impress information of company's future, the company which increases its cash dividend has more income than the one which reduces its cash dividend.Chapter four focuses on whether to distribute dividend. From thedemonstration, we find that the main factors influencing dividend policy are assets size, assets structure, risk, management and the ability to make profit.Chapter five discusses the following three aspects. First, standardizes the distribution of dividends; Second, the principles that must be obeyed when listed companies make their dividend policy; Third, the content of dividend policy. This chapter puts forward the system of standardizing the distribution of dividends and the system of information exposure in order to alter the situation that some big shareholders dominate companies and realize that shareholders have the same right with the same shares. It also provides a series of suggestions on how to regulate and improve accounting measures of the distribution of dividends, on how to enhance the diathesis of investors and how to perfect the system of protecting the interests of small shareholders.