Relevance Study Of Cash Dividend Policy, Equity Dividend Costs And Debt Agency Costs

Dividend policy,financing decisions and investment decisions are called the three core content of the enterprise financing.In western capital market, the cash dividend policy has become common dividend payouts since the 1980s. Chinese capital market start operation in the planned economy period so far for nearly thirty years. Its'development mode and dividend policy, etc is different from the western countries because of the unique economic foundation and development process. If the dividend theory that originated from western can provides a reasonable explaination for dividend policies in China?Scholars made many research to explain this phenomenon.Based on this situation, the paper research the relationship between corporate cash dividend policy and corporate governance based on equity agency costs and debt agency costs theory.This paper firstly reviews the history of agency theories empirical researches and foreign and domestic empirical researches.Agecncy costs theory is one of the mainstream theories to interpret the dividend policy.The agency problems in China listed company is very serious because of the special ownership structure and the low efficiency stock.Therefore, it is necessary to improve the corporate governance and protect the shareholders's rights .Using Probit regression and multivariate regression analysis methods,the paper analyzes the influence of the corporate governance on dividend policies of listed companies from the perspective of dividend decision-making and dividend payout ratio.Firstly,there's a positive change in the payout of cash dividend since 2001 . Secondly , there is a significantly negative relationship between cash dividend payout and the agency costs levels of the listed firms , which means that dividend can act as a disciplinary mechanism to reduce agency costs The results are consistent with the outcome agency model of dividends.This result shows that improve corporate governance and protect minority shareholders rights enhance dividend payout and dividend effect on corporate governance.Based on the characteristic of the China's capital markets and the dividend policy, it is necessary to discuss whether these dividend theories effectively interpret the dividend policy in China or not. In this paper, all summarize as follows:Firstly,it introducing the relative theory include traditional dividend theories,modern dividend policy theories and behavior theories etc.Secondly,this paper establish two multiple linear regression models to study which factors can affect the cash dividends.Finally,the results showed that the agency relationships between the shareholders and managers and creditors are of great impact on the cash dividends. Aiming at improving the dividend agency cost problems. It is recommended how to better improve it and promote the capital market's development.