Dividend Policies Of Chinese Listed Companies

In the financial decisions of a listed company, the dividend policy decision plays an important role from beginning to end. The dividend policy decision which involves the standardization of the action of a listed company, and the perfection of the securities market of China as well as further development of the listed company on their own. Also, it has some effect on the stock-holders ?interest. Generally speaking, continuous and stable dividend policy helps establish good images for the company, and thus ensures a steadily-growing stock price, but it has specified restrictions on the snatching favorable investment opportunities; on the contrary. No continuous dividend policy benefits the timely catching of the investment opportunities, but it is not favorable for the establishment of the company?s images and the rising in the stock price. The high payout ration dividend policy will increase the earnings of stockholders?at present well. It also helps raise the stock price, but it may decrease the reserve income, which leads to increasing liabilities and rising financial risks, then in the end the damages to the Stockholders? rights, while it is not advantageous to improve the stock price. The low payout ration dividend policy will lower the financial risks and raise the stability of management. As it discussed above the dividend policy decision is concerned with a process when determining the issues on dividend both the current benefit and future benefit as well as the development of company and the stockholder?profit taken into account, the management trades off the advantages and disadvantages between remaining profit for investment and paying out to the stockholders. In the process of mere ten years development, owing to various reasons, the management of Chinese listed company have scarcely apply 1 modern dividend theory as guidance to work out scientific and reasonable dividend policy, combining the long-term development. Seldom have they applied the modern principle and method of dividend distribution theory to the direction and manipulation of the practice of dividend distribution. Therefore the dividend policy of an the companies appears comparatively chaotic, typically charactenstic with short-term actions and leaks seriousness and continuousness, which is not favorable in the further advance of the listed company themselves and the overwhelming number of investors?legal rights, furthermore not helpful to the stable, healthy, orderly development of the Chinese stock market. On account of all various reasons, historical and practical, western countries began the research on the dividend policy comparatively early, and the normative and positive research are also mature. China started relatively late in this respect and fairly mature research outcome is not easily available. The lack of the guide of theoiy that adapts to the reality of China is an important reason for the inadequate science and soundness of the current dividend policy with the Chinese listed company. Just as numerous theoretical and practical workers. The author?s original purposes or ever the best wish is that through our work, I can dedicate to the standardization and scientiflcation of the dividend policy of Chinese listed company to some extent , and lay down apiece of cornerstone for the approach to the truth, Even it is a failure, it can provide lessor for the later research and avoid taki...