Research On The Relation Between Cash Dividends Policy Of Listed Companies And Company Performance

Listed company’s financial management activities include three core parts: dividendpolicy, investment decisions and financing decisions. The dividend policy which is animportant part among the three has been the focus of research scholars.The cashdividend policy is a way of return to investors and it is the top priority of the study.It isnot only related to listed companies financial management and stable development ofthe capital markets, but also related to the income of each investor. The level ofperformance determines cash dividend distribution policy of listed companies. In turn,reasonably stable cash dividend policy reflects a company’s overall strength, create agood image for the company to get the trust and loyalty of investors and lay a solidfoundation for the long-term development improving the performance level of thecompany for the future, but also conducive to the healthy operation of the capitalmarket.However, there is still large randomness on China’s current dividend policy of listedcompanies. Short-term behavior is more obviously, lacking of stability and continuity.Stingy phenomenon, low cash dividends, cash dividends and other anomalies over cashdividends phenomenon is not uncommon. In view of this, the author first introduces thecash dividend theory and the company performance theory. Secondly, statistics2008-2012A-share dividend policy of all listed companies in Shanghai and Shenzhen,analysis the current situation of China’s listed cash dividend policy and compares withthe United States, the representative of the foreign policy of cash dividends in maturemarkets to find out the differences and to reveal practical problems and inherent reasonof China’s listed companies’ cash dividend policy. Then, we use all listed companies inthe central provinces of2008-2012years of financial statement data as the researchsample, using the ways of descriptive statistics, correlation statistics and multipleregression models, using E-views software to analysis correlation between cashdividends policy of listed companies and company performance.By analyzing we findthat the level of corporate performance is positive correlation to whether the distributionof cash dividends of listed companies and the level of the distribution of cash dividend.Basing on theoretical and empirical analysis, the thesis puts up forward threeaspects’ countermeasures to solve practical problems of cash dividend policy. Developthe normativeness of listed company, innovate cash dividend policy. Cultivate the stockmarket investors actively to form dividend market laid-off mechanism. Continue toreform the government regulatory system, improve cash dividend distribution system.The innovation of this paper is the study period selection, against the listed companies’dividend policy after equity division reform.