Research On How The Cash Dividend Influences The Enterprise Value

Dividend policy is one of the three core financial activities of the modern companies, Dividend distribution policy is the core of the distribution of profits of listed companies. Dividend policy is not only related to the company whether long-term and stable development, but also closely linked to the vital interests of investors. Thus the listed company adopts what kind of dividend policy can achieve the maximization of enterprise value has been the focus of attention. Cash dividend is one of the world’s most common dividend form, the cash dividend whether is appropriate or not is related to the financing channels whether are unblocked or not and the rationality of capital structure. In some extent, the company pay dividends can reduce agency costs, and stable cash dividend conveys the signal of good future growth of the company to investors and reduces the information.In the1990s, China began to setting up a stock market, by now the number of listed companies in China nearly2000; they have become an important part of China’s economy. After1995, the literature of theoretical research and empirical research on the dividend policy of listed companies in China appear in succession, from the time point of view, our country dividend policy related research is still in the stage of exploration. From our country listed company financial management practice to see, before2000, the company management is lack of attention on dividend policy in effect on company finances, mainly reflected in the listed company dividend policy target is not clear, formulated random, the interests of investors have not been given due attention, dividend payout is lack of regularity and continuity, blindly cater to the needs of the market. This study found that in the years after2006, the listed company’s cash dividend policy is more mature than before, cash dividend is more rational. Such as the quantity of listed company which distributes cash dividend increased, and dividend payments rate increased, the dividend distribution continuity improved, and no allocation problem ease for certain. This paper thinks that an important reason of the listed company dividend policy in China is becoming more rational is regulatory policy adjustment. Before and after2000, the China securities regulatory commission adjusted the listed companies financing policy, considering the dividend distribution policy as these factors, increased the strength of investor protection. Practice has proved, the policy guide promoted the listed companies to establish more rational dividend policy. This phenomenon shows that cash dividend policy of listed company affected by the strength of investor protection.In this thesis, the research object is how the cash dividend influences the enterprise value. Two aspects for research are the cash dividend distribution level and cash dividend stability. For the cash dividend distribution level, select all share A listed companies in2010as sample, for empirical analysis on the relations of each unit cash dividend and enterprise value. For the dividend stability, select all share A listed companies from2006to2010as sample, set dividend stability as the virtual variable, and assume that continuous five years dividend paid rate of standard deviation is less than0.05for dividend stability, then empirical research. Considering the enterprise value is influenced by various factors, this article has selected ROE and so on as control variables. Regressing models with spssl7.0data software, the empirical results show that the cash dividend per share has a significant positive correlation with enterprise value, that is, the higher the cash dividend per share, the higher enterprise value. At the same time, also found that dividend stability itself does not significantly affect enterprise value, but the amount of cash dividend while maintaining stability will affect the enterprise value.