Connection Between Dividend Policy And Company Value

As one of the main decision-making of the organization and arrangements forlisted companies, a reasonable capital structure, dividend policy, on the one hand,reflects the listed companies, equity holders should be entitled to remuneration for thenecessary status of payments, on the other hand are also listed companies to conveyinformation to the market, market-seeking an effective means of feedback. Previousstudies have shown that the majority of listed companies more inclined to choose theform of cash dividend policy, and the dividend policy is highly effective in mitigatingthe contradiction between the company management and shareholders. However, intoday’s market conditions, dividend policy tend to become one of the main criteria tojudge the value of the company and the company’s future development trends. In thiscase, the change in dividend policy choices or the cash dividend distributed not onlydepends on the game between management and shareholders of the listed companies,but rather should reflect the market value of the company to determine.The paper focuses on the correlation between the listed company’s cash dividendchanges in the value of listed companies, on the one hand, to identify listedcompanies in determining dividend policy adjustments with reference to the relevantelements of the value of the company, verify that the management of listed companiesto transmit information to the market through dividend policy thus affect the marketchoice behavior tendencies; the other hand, to determine the dividend policy, whetherto reverse the decision of the value of listed companies, the real investment horizonsof investors as an information feedback form. Two will get the empirical results of thecorrelation between the value of listed companies in China with the dividend policyadjustments, on the one hand, verify that the establishment of classical finance theoryin the Chinese market, on the other hand provided reflect the basic characteristics ofChina’s capital market fact, to lay the foundation for our investors a reasonablescreening and to determine the value of listed companies. Based on research ideas and research purpose2005-2010all payment of cashdividends listed companies was chosen as the study sample, control-related variablesaffect the premise, the use of panel data model, respectively, measure the value oflisted companies listed company cash dividends distributed strategy the impact ofcash dividends of listed companies to adjust the effect of the value of listedcompanies. Summarize and organize the past, theoretical and empirical researchresults on the basis of the empirical model results obtained show that listedcompanies in the choice of dividend policy, profitability is one of the main referenceto consider the dividend amount, of course, this process internal management will bebased on the stability and sustainability of the dividend policy on dividend policyfine-tuning; look at the regression results from the part of the value indicators, listedcompanies clearly have a tendency to the value of external delivery information,which are the value of information will eventually way of dividends passed to marketinvestment. The dividend policy of listed companies on the changes in value of thecompany has some explanatory power, although some indicators of the regressioncoefficients showing the characteristics of differentiation in the different models,dividend policy, the combined effects of changes in value of the company, and thiseffect is manifested not only for the dividend policy promoting the market votingupdate the market value of the company’s recognized, but also due to dividend policyto pay to change the way people directly determine the intrinsic value of listedcompanies, the role of the two directions will eventually reflect the combined effectsof the company the value indicators. Of course, dividend policy and firm value itselfis an endogenous, because the dividend policy, the listed company may transfer to themarket, thereby affecting the market investors recognized the value of the company,the choice behavior of market investors will amend internal dividend policy choice,both in a symbiotic and covariant interaction structure.