An Empirical Study On Market Reaction And Determinants Of Ultra-ability Dividends Payout In Chinese Listed Companies

The cash dividends, as major terms of payment in the payout policies of various western countries, plays a significant role which can't be substituted by other dividend terms of payment. Therefore, although under the condition that cash dividends income tax rate exceeds the capital income tax rate, overseas enterprises still grant a great deal of cash dividends and adopt steady policy. It is noteworthy that the payout policy of Chinese listed enterprises is more diversified than that of western countries. The phenomenon of "non-distribute payout" and "ultra-ability dividends payout" once appeared greatly. Especially in recent years, "the ultra-ability dividends payout" is more noticeable. As for such a phenomenon, simple policy-driven factors of management cannot explain it well.Based on aforementioned reasons, a series of theoretical and practical problems in terms of market reaction and influence factors of ultra-ability dividends payout in the economic transformation period were discussed in this paper through theoretical analysis and empirical testing. Then theoretical support and policy suggestions were provided for the supervision of stock market of Chinese listed companies.On the basis of reviewing the existing literature, the paper examined the market reaction of the ultra-ability dividends payout announcement by Cumulative Abnormal Return method (CAR) The empirical result shows that the market reaction is quite impassive and even negative. Moreover, the ultra-ability dividends payout doesn't deliver any valuable information. Then, research samples are matched one by one with controlled samples of listed companies from 2000 to 2003. Additionally, the mean test as well as Logistic regression method was adopted to analyze the influencing factors of ultra-ability dividends payout. The results show that the shareholding ratio of first shareholder, the State-owned Assets Supervision and Administration Commission of the State Council, PRC as the first shareholder, the return rate of net assets close to bottom line (6%-7%) are positively correlative to the ultra-ability dividends payout while the listing time of company has negative correlation.In conclusion, proceeding with the ownership structure of listed companies, legal mechanism and supervision of stock market of our country, policy proposals of how to govern ultra-ability dividends payout were put forward.