Empirical Study Of Listed Companies In Cash Dividends And Stock Dividends

Dividend Policy is the strategy adopted by the company on market to dispose rationally from the post-taxation interests into the ptofrts given to the stockholders and the retained earnings. It's an extension of the activities of the company to raise and invest money. What more, viewing form its effect on market and economy, dividend policy which is acting as a mirror of the operations and achievements of the company, may not only influence the image of the company, but also cause the fluctuation of its stock price. Regarded as one of three major policies of the financial administration of company, the dividend policy has been a great difficult problem in the financial administration, and it studied the extensive concern of the family by the domestic and international finance. There are cash dividend, stock dividend, debt type dividend and stock buy-back in fact in payment forms of the dividend. In chain, dividends are mostly given through cash payment and stock payment. Compared with overseas companies, the investors for a long time of stock market are little and the speculators are more in China. This is because the dividend of our country is at will strongly; no continuity and the dividend-earning ratio are extremely low. Even some companies the continuous dole out cash dividends make and ordinary show on stock price. On the other hand, companies that dole out stock dividend give a good manifestation on stock markets before and after their announcement on the stage. This paper empirically analyzed the effect of the cash dividend and stock dividend on stock price through Cumulative Abnormal Return (CAR) method. Apparently stock dividends own a higher percentage of abnormal return. As a result, investors prefer stock dividend rather than the others. Nevertheless the author also analyzed in detail that the company intend to employ different dividend policies from company of different earning, different scales, different stock right structure and different trades. Finally, according to the proof of the evidence and the practice of the overseas on-market companies the author gives some suggestions on regulation of dividend by companies.