A Endogenous Equity Study On Expansion Motivation And Effects Analysis Of Listed Companies

Fish and Black (1976) treat dividend policy as a "dividend puzzle." Brealey and Myers (1992) list dividend policy as the top ten problems of corporate finance. How reasonable distribution of dividends- formulate rational dividend policy has been a thorny practical problems for the management of listed companies, it is also one of the unresolved financial problems until now. In fact, as early as 1938, Williams opened the curtain of dividend theory study . Lintner (1956) is a pioneer in the theory of dividend study, he was the first one who proposed the dividend of the theoretical model. He also believe that the majority of companies will opted to choose stabilize or increase the dividend policy even under the case of poor performance .Dividend policy is a decision-making when listed company achieve earnings (or profits) they distributed among the shareholders. Dividend Policy of Listed Company in western is relatively healthy; where in China the dividend policy of listed companies is often changing and lack coherence ,they take various factors into account so as to meet the needs of all parties. This paper is based on this background. The author combines the two perspectives of investors and listed companies in order to study the motives of the dividends of listed companies in China from the point of meeting views2003,Baker and Wurgler summarized the dividend catering theory which combined financial theory with the behavior of investors .The theory has opened up a new perspective in behavioral finance. This paper is based on this .The catering theory feel that the Management of listed companies announced dividend policy which depends on the needs of investors .The managers develop corresponding dividend policy caused by investors seeking different in dividends and capital gains. Baker used the meeting variable in his paper for the first time, and now domestic scholars use this variable to analyze listed companies and investor behavior in China, this is also true. This study selected 2007-2009 as the research period .The studying samples were selected only Expansion of equity capital within the company source. From the meeting variables, results of operations, market performance, corporate governance and corporate characteristics of five areas, the author use Multiple Logistic model to investigate different motivation for capital expansion of listed companies in China with different internal sources. Finally, this paper use event study methodology to determine whether investors can recognize the different sources of dividends, and then they have different reactions to different listed companies on a different dividend policy.After the analysis, the paper concluded that: (1) Respect to payment of stock dividends and mixed payment, reserve capitalization means the lowest cost .So if only to cater to investors, listed companies will tend to transferring the way of reserve capitalization, the catering variables is the most significant; (2) Investors give equal treatment to different sources of dividend which mean they may be unable to distinguish different sources of dividends. the stock dividend and reserve capitalization both can take place of cash dividends to investors , they would enjoy this form of dividend distribution rather than nothing,; (3) Overall, the listed companies'Equity share capital of the expansion of endogenous is catering to the needs of investors. Finally, the paper proposed limitations and deficiencies. Although this conclusion means a little bit bias with respect to common sense, the authors believe it has reference value.