A Study On Cash Dividends Policy Under Stock Right Decentralized Allot Revolution

The significant research of dividends policy about the modern coporations commenced from the Miller-Modigliani (1961) dividend irrelatance theorem .Subsequently, signaling models, agency models,and clientele models were brought forward by some experts who relaxed the rigorous framework for analysing payout policy. They designed the analysis configuration based on maximizing shareholders'wealth and investors utility.In the structure,the findings of dividend policy must consist with not only the actual observation but also the empiricial evidence.From declaring stock right decentralized allot revolution in April 29,2005, the thirtieth group companies started the reform in July 2007. In order to acquire the tradable right, no-tradable shareholders need to pay the price to tradable shareholders,which could resolve distinction between the tradable and no-tradable stocks to some academic extent.Consequently, no-tradable stocks would be allowed to exchange in the stock market,which could comoletely eleminate the problems"same unit,equal right,discriminatory price".Seen from results of the empirical analysis, depending on it's controlling superiority, listed companies still occupy the benefit of the small and medium-sized stockholders after equity division by distributing cash dividends, the second to the tenth largest shareholders are not able to form effective check and balance to the largest shareholder presently and for their own interests, they will be together with the largest occupying and plundering the wealth of the small and medium shareholders. Listed companies distribute cash dividends for the purpose of reducing free cash flow, the empirical tests in this paper only provide a relatively weak evidence. In sample companies which the percentage of shares in circulation is over than 50%, circulating shares ratio and cash dividend are negatively correlated,in which the percentage is less than or equal to 50%,the two are positively correlated. In general, the evidence provided by this paper is still insufficient to prove that there is significant negative correlation between tradable ratio and cash dividend payout.Dividend characteristics of listed companies do not change obviously after equity division, this is mainly due to the various restrictions on circulation of non-tradable shares and no obvious change of ownership structure. The policy proposals in this paper are as follows: First, it should be considered in policy the possible impacts on the market that a large number of non-tradable shares going into market and circulating, as well as a series of issues such as protecting the rights and interests of the legion stockholders, but policy makers should focus on strengthening the supervision of behaviors such as manipulation of stock prices as to non-negotiable shares going to market, insider dealing, high position arbitrage, and must intensify the power of policy punishment. Secondly, only improve and strengthen the protection of the laws,"Company Law","Securities Law", etc., for the interest of medium and small size companies can effectively prevent the major shareholder taking it's controlling advantage transferring and appropriating the wealth of the medium and small, including transferring the listed company's cash through multi-way cash payment;at the same time, on the law of procedural the burden of proof should be enhanced when prosecuting major shareholders, and reduce small shareholders'litigation cost to preserve their rights. Finally, reducing the proportion of shares held by major shareholders, increasing that held by institutional investors, and further improving the supervisory board system and independent director system of listed companies can fundamentally protect the interests of small share holders.