Study On Construction Of Cash Dividend Ability Index Of Listed Company

As the core content of financial management of listed corporation, dividend policy, especially the cash dividend distribution policy, is not only related to the interests of investors, but also affects the future development of the company. For investors, revenues from buying stock mainly include dividend income and capital gains. Cash dividend not only improve the income structure of investors, but also reduce the capital market speculation, so cash dividend can help investors develop good investment behavior. For management of the company, cash dividend can deliver positive signal to the outside world to attract more investors, can also reduce the agency cost between management and investors, improve the efficiency of the capital. For supervision department, it can help investors develop the correct investment concept, and balance the relationship between investors and management, to maintain the normal operation of the capital market.Although cash dividend is of great significance to investors, management and supervision department, heavy financing light returns is widespread in the listed corporations. In order to promote the company to distribute cash dividends, the SFC has issued a series of regulations, especially after hooking refinance and corporate dividends, company dividends gradually improved. But it is worth pondering that this policy neglects dividend capacity. Now the situation of cash dividend has improved, is it because of the policy or the company dividend capacity did improve? Therefore, it is necessary to evaluate the dividend capacity of the company, to inspect whether the company’s dividend is consistent with its ability of profit sharing.Based on investor risk aversion theory, the pecking order theory, dividend life cycle theory and signal transmission theory, this paper combs the influential factors of cash dividend, including:the characteristics of the industry, company size, the future investment situation, profitability, growth ability, operation ability, solvency and available for allocation of assets. Secondary level index shall be selected in accordance with the principle of comprehensive, importance and representativeness. Primary index by using the AHP to determine the weights, secondary level index by using factor analysis method to determine the weights, and finally construct the index system of list company cash dividend capability.According to the research, the content of each chapter is as follows:The first part is introduction. This part mainly introduces the research background, research significance, research ideas and research methods, research content and research framework.The second part is the literature review. In this part, after reviewing domestic and foreign cash dividend distribution literature from the affecting factors of cash dividend, distribution motivation, market reaction and the cash dividend payment ability, author determined the research direction of this paper. Because literature from the point of the cash dividend ability is less.The third part is the theoretical analysis. Theoretical studies of the cash dividend is very rich, but considering the relevance to the article, the article selects only capable of supporting the research theory. This part provides a theoretical analysis, mainly from the investor risk aversion theory, the pecking order theory, dividend life cycle theory and signal transmission theory, in order to provide a theoretical basis for the study of this paper.The fourth part is to build an index of cash dividend ability. This is the core part of this paper, mainly including the index selection, weight determining by using the AHP method and factor analysis method, and finally the dividend ability index system.The fifth part is to apply this index system to calculate and analyze the listed company’s index value. Firstly, according to the index system, this part calculate the dividend ability index of A shares in2012listed corporations. Then paper gives a descriptive statistical analysis to the dividend ability index. Finally, paper analyses the difference between dividend ability and dividend. In the calculation of the ability index, this paper use the standardized method to dimensionless index, to eliminate the different industries effects in different units of measurement range. The average value and the standard using in the standardized method are calculated by the industry data. The process of calculation takes the difference index type into account. When the index value for0,1, the index of the single index value for0or100; when the index is not a value of0or1, take the dimensionless numerical index linear into domain for [0,100] as the index of single index value. Finally, the listed corporations dividend ability index equals individual index values multiply by weights. This paper adopts the A shares in2012data to compute company cash dividend capacity index, and the ability of cash dividend index was carried on the validity analysis. Then use the index to analyze the company cash dividend.The sixth part is the conclusion and prospect. This part summarized the process of the dividend ability index construction and application, and get the conclusion of the study by AHP method as follows:(1)In this paper, the main factors influencing the ability of cash bonus are the profit ability(37.26%), debt paying ability(19.55%), distributable of assets (18.19%) and future investment situation (9.89%).(2)The descriptive statistical analysis on cash dividend index found that the cash dividend index of dividend company is significantly higher than non-dividend company, and the cash dividend index of high cash dividend is significantly higher than that of low cash dividend. So the company cash dividend ability index in certain level can forecast the actual bonus strength.(3)When analyze the cash dividends and the ability of cash dividend, we found that cash dividend is much higher in a high dividend capacity company than that of low. The A-share market as a whole shows the characteristics of dividend and bonus match actual strength.(4) All this show that our A-share market exist such a phenomenon, that is,"high dividend ability company has low dividend or no dividend" and "low dividend ability company has high cash dividend". According to the research results, this paper puts forward two suggestions:(1)When hooking the refinancing and cash dividends, The SFC should let the company which refinancing by the orientation out of equity investment projects be accordant with the provisions, that is, in recent three years, with a total cash distribution of profits should not be less thirty-percent than the average annual distributable profits in the last three years.(2)The SFC can design a system to evaluate ability of cash dividend, and evaluate the ability of cash dividend of all listed corporations in order to develop a more rational dividend policy.The limitation of this article mainly lies in the establishment of the evaluation system. This paper measures the company dividend ability from eight aspects, but there may be other important factors that not included. Future investment situation is made only qualitative consideration. At the same time, are the second level indicators representative and comprehensive? It is a certain degree of subjectivity that using AHP method to determine the weight of evaluation system. And the cash dividend index cannot evaluate the financial industry, missing data and listed company less than3years. In the future, scholars can conduct more thorough research about influence factors of cash divided ability, further improve the evaluation system of bonus ability, choose the more representative indicators.