Dividend Policy Implications Of Factor Analysis

In this paper, we mainly research the dividend policy of the listed companies in China, with particular attention to the distribution of cash dividends. As one of the three core content of the modern corporate finance activities, dividend policy, financing decisions and investment decisions are called the listed company’s three major financial decisions, but the research on dividend policy has not yet reached agreed conclusions, therefore, the dividend policy has been known as the "dividend puzzle". Dividend policy is that the listed companies pay dividends or not, how much to pay and when to pay dividends. It is closely related to the interests of shareholders, which the company returns to investors. Different dividend policies result in different amount of dividend payment and the company’s retained surplus, so we concluded that the dividend policy not only reflects the listing results of operations of the company in the past period of time, but also indicates the company’s growth potential and business strategy, which affects the company’s market value, financing capabilities, and the company’s future development. In recent years, the cash dividend distribution policy, as an important part of the dividend policy of the listed companies, has been paied close attention from parties. Since Lintner (1956) and Miller and Moligdiani (1961) pioneered the study of dividend policy, in fact, a lot of research have focused on dividend policy,reaching different and even conflicting conclusions. This is then called the "dividend puzzle",which draw more attention from scholars. who try to solve the chaos, and this form a big development direction.With the cut-off point of the share structure reform.we studied the ownership structure of the listed companies from two dimensions of equity nature and equity concentration, according to the collection of data in2006-2010in a form. On the one hand, the statistical description explained how equity nature and ownership concentration in the ownership structure influence the level of cash dividends. On the other hand, we introduced the multiple regression model, making regression analysis between after-tax dividend ratio and the dicators of equity focus, like the proportion of the largest shareholders, earnings per share, net cash flow in operating activities per share and asset-liability ratio, analyzing the relationship between ownership concentration and cash dividend distribution and eventually come to the relationship between ownership structure and the level of cash dividend distribution of the listed companies after the share structure reform. Then we combined with comprehensive analysis and comparative research methods, and contrast study home and abroad theory and gave our own opinion.The innovation of the paper is that, firstly, we studied the distribution of cash dividends of listed companies in2006-2010, which had been listed before the end of2005.This maintained the continuity of the sample, and to some extent, improved the accuracy of the analysis; secondly, the empirical study is based on the ownership structure of the listed companies influencing cash dividend, and ownership structure is divided into two aspects,that is, equity nature and concentration of ownership,to do more detailed study; thirdly, this paper combined statistical description and multiple regression model to do an empirical analysis of the relationship between ownership structure and the cash dividend distribution, which made conclusion more accurate.The chapters of this paper are organized as follows.The first chapter is the introduction.This part will include the research background, research objectives, research significance, research methods and research ideas.The second chapter summarized the contents of the dividend policy, including the definition and classification of dividend policy and dividend program.The third chapter introduced two theories of dividend policy, that is, dividend irrelevance theory and dividend theory. This chapter also included a literature review section which is a comprehensive combing the domestic and international literature on the impact factors of the dividend level, and laid a solid basis for the empirical analysis.The fourth chapter is divided into two parts,describing the current situation and problems of China’s cash dividend policy,and attempting to explain the reasons resulting in these problems. The fifth chapter consists of three parts, including the introduction of the split share structure reform, the statistical description of the impact of ownership structure on cash dividends after the split share structure reform, and empirical findings.The sixth chapter is to give some proposals to improve the dividend policy, like having a sound legal system to the protect minority shareholders, fostering institutional investors to promote diversification of ownership structure, improving the market environment to put some external restrictions on the listed companies,and etc.