Issuance And Cash Dividend Policy-relevant Research Listed Company Private

Normally, when money is tight, the listed company will refinance in order to increasethe company’s cash flow. But why some companies that once complete the Directionaladd-issuance will tend to immediately hand out cash dividends, resulting in a largerproportion of the available funds transferred out of the company? This behavior, on the onehand, weakens the company’s financial support capability for new projects or expandingthe operation scale, conflicting with the purpose of directional add-issuance; on the otherhand, since there is so much cash that can be used to offer dividends, why do theyrefinance to the major shareholders?In this paper, the company conducted a private placement of listed equity refinancingand high cash dividend payment as a starting point to study the relationship between thedirectional add-issuance equity financing behavior and cash dividend distribution behaviorof listed companies. This paper is based on the sample of A-share listed companies whichhave implemented directional add-issuance or not refinancing from2009to2011onShanghai and Shenzhen Stock Exchanges. Through screening, company will be dividedinto the directional add-issuance group and not refinancing group, and the directionaladd-issuance group companies will be further divided into the large shareholdersparticipating in the directional add-issuance group and large shareholders not participatingin the directional add-issuance group. And then compare the two groups with empiricalmethods to see the effects of directional add-issuance behavior to pay cash dividendswillingness and level.The results showed that the Chinese listed companies pay more cash dividends afterdirectional add-issuance completed than those not refinancing; the companies with thelarge shareholders participating in the directional add-issuance pay more cash dividendsthan the companies with the large shareholders participating in the directional add-issuance.According to the results, the directional add-issuance behavior of listed companies has asignificant impact on its cash dividend policy.Based on the results of the empirical analysis of listed companies in China, I putforward relevant policy recommendations to regulate the directional add-issuance behaviorand the payment of cash dividends behavior, and to further protect the interests of minorityshareholders.