Relations Research Between Dividends Payment And Earnings' Quality Of Listed Companies In China

Dividend policy is one of the cores of modern financing activities. From the birth of Shareholding Companies, dividends distribution had been a focus issue to both the company managers and the investors. This paper started with actual situation of cash dividends of Chinese listed companies, and then researched the relations between dividends distribution and the earnings' quality of these companies. First of all, the article based on the situation that gradually, cash dividends distribution became a important way for good performance companies to feedback investors in Chinese capital market, tested the earnings' quality distinction of listed companies distributed cash dividends or not. And then tested the relations between cash dividends payment rate and earnings' quality with the samples. At last, considered the special development process of Chinese capital market and the request of refinancing which prohibited companies who didn't distribute cash dividends in three years refinancing and so on, this paper classified the whole samples into high distribution and low distribution, and tested each of the relations between cash dividends payment rate and earnings' quality. The results showed that, the companies which distributed cash dividends had a good earnings' quality, this mean that companies could not easily distributed cash dividends without the guarantee of earnings. The dividend behavior would show certain signal, but it was not so obvious. Companies in different dividend level had different relations between cash dividends payment rate and earnings' quality, the high part had stronger correlation obviously.