An Empirical Study On The Relation Of Cash Dividend Policy And Sustainable Growth Rate Of Chinese Agricultural And Food Industrial Listed Company

By the Sustainable Growth Model created by Robert·C·Higgins and James·Van·Horne,we can see that different dividend distribution policy affects owner's equities, and ultimately will affect the sustainable growth rate; while the priority theory of financing tells us that enterprises should considerate the inner sources as the primary basis of the financing to maintain steady growth, therefore, enterprises should combine the sustainable growth and cash dividend policy ,which will not only help to enhance the management of financial planning and co-ordination of decision-making level, but also can promote enterprises to develop a clear dividend policy, as a result, we can't only seek "a bird in the hand", but also plan for "two birds in the forest".Firstly, in this paper, the One Sample Test method tested the two hypothesis, " the actual growth rate was significantly lower than the sustainable growth rate when cash dividends of listed companies were presented," and "faction is now a high amount of company, the actual growth rate was significantly lower than the sustainable growth when cash dividends of listed companies were more presented ". But test results do not support these two assumptions, which suggested enterprises even sending more dividends under the relatively tight budgetary situation .Such financial policy is not in conformity with the requirements of the Sustainable Growth Model, therefore, China's agricultural and food industrial listed company's cash dividend policy is unreasonable, based on the sustainable growth theory.Secondly, this paper consider the sustainable growth management as the explanatory variable, and the indicators of smooth theory, the indicators of four financial capacity, as well as indicators of agency cost theory as control variables. By correlation analysis, Logistic model analysis and multiple linear regression analysis , we study the impact of sustainable growth management on cash dividend. Research results show that the coefficient of the different growth rate is a plus sign, which explained that the dividend payment rate and the different growth rate are positively related, and the different rate is bigger, the dividend payment rate is higher. Sustainable growth management is not an important factor affecting cash dividend policy, Otherwise, the control variables strongly affect the cash dividend policy, such as ROA,ROE,EPS,FCF,etc.Thirdly, by the factor analysis method, this article explore the balance between the sustainable growth rate and the cash dividends ,the four major financial capability. The research results show that it is positive correlation between the cash dividend policy factor and the sustainable growth rate, which is contrary to the hypothesis. Finally, the article based on information transmission theory, used the event study method to verify the cash dividend to pass information of the sustainable growth in the stock market, the test results indicate that investors in listed companies is not concerned about the financial strategy of rational Cash dividends.As for the sustainable growth theory, when the growth of company has surpassed own resources limit, the company should not send or lowly send the dividend as far as possible, in order to satisfy its own growth to the resources demand. Superficially the result contradicts with the sustainable growth model's request, which, in fact, is not true, then how to explain the above the result? The possible explanation has three points: First, the difference growth rate is bigger than the zero , namely the enterprise grows quickly. In the intense resources situation even sending dividends presently , is to satisfy the demand for the exterior financing, because our country has the strict conditions regarding to the stockholder's rights financing application, how many the cash dividends are sent is a request, therefore the enterprise must provide the cash dividends first, then can obtain the more exterior stockholder's rights funds, but exterior financing , has solved unmet needs of the corporate growth, and has supported enterprise's sustainable growth. The massive scholars discover the listed company in our country is partial to the stockholder's rights financing ,which also confirmed this point; Second, for the listed companies in two industries, the universal control level in the financing plan is not high; Third, our country's faction presenting has other non-finance factor restriction, for instance, the proxy cost element, the smooth theory factor and so on, which obtained the confirmation in the cash dividends influencing factor's research.