Business Agent For The Cost Impact On Dividend Payout Rate

This paper studies agency costs on dividend payout ratio about China of theemerging economies.As the dividend payout ratio directly affect the outsideshareholders, especially the interests of minority shareholders. In order to make therelevant people to understand the dividend policy, thereby reducing the informationasymmetry degree of risk and reducing agency costs of equity. This paper quantifiesthe level of free cash flow, the degree of insider ownership, the proportion ofindependent directors, the largest shareholder ratio and debt ratio. These five factorsaffect the dividend payout ratio. By regression analysis, the relationship between theratio of free cash flow and dividend payout ratio is U-shaped. By regression analysis,the relationship between the debt ratio and the dividend payout ratio also isU-shaped. Relationship between the largest shareholder ratio and the dividendpayout ratio is inverted U-shaped. The proportion of independent directors and thedividend payout ratio is a negative relationship.After the2007financial crisis, a large number of foreign investors have be outof the market. There is no sign of return to the market, because regulators failed toprotect the interests of foreign investors. During this period, the average dividendpayout ratio declined. Lack of protection of outside shareholders may be a generalphenomenon in an emerging market. Therefore, to enhance the protection of theinterests of outside shareholders is need to be solved. This is exactly the significanceof this study lies.