The Impact Of Cash Dividend Policy Of Chinese Financial Listed Corporations On Corporate Value

Dividend policy is the principled behavior taken by shareholders or the board of directors for all matters related to the dividend. They are the policies and strategies which are related to whether to pay dividends, how many dividends they should pay and when to pay them, involving income distribution or retained for reinvestment strategy. It not only reflects the operating results and management behavior of enterprise, but also affects the company’s external image. In order to improve enterprise value, company hope builds good image through dividend distribution. Outside investors try to understand internal management and development ability of the enterprise by dividend policy. Therefore, to formulate reasonable dividend policy of listed companies is of great significance. Of course, when high risk and high debt financial listed companies face the problems of increasingly standardize the securities market, rational investor demand and company’s own value assessment, they are more urgent need of suitable,scientific system of theory and empirical research to standardize and guide the dividend distribution policy. Therefore, based on the predecessors to the cash dividend policy of listed company and the enterprise value of the research, aimed at the special financial industry listed companies, further study of the cash dividend policy and the relationship between the enterprise values has certain theoretical significance and practical significance.Based on the research significance of this article, the author combing the literature and discuss financial cash dividends of listed companies in our country’s impact on the value of the company. In this paper, the first chapter is the introduction. we first descried the background briefly as well as the theoretical and practical significance;secondly, the paper reviews related literature at home and abroad; finally, the paper sorts out writing ideas and research framework, proposes innovations and the deficiencies of this research.The second chapter is a review of dividend policy and corporate value. In this chapter, we introduce involved dividend theory and methods of evaluating. Dividend theory includes traditional dividend theory and modern dividend theory. And there are three methods to evaluate companies’ value: relative value model, Tobin’s Qand economic value added approach. The introduction of these methods will theoretically support the empirical analysis below.The third chapter describes current status of listed financial companies’ cash dividend distribution. In this section, we analyze the current situation of financial listed company’s cash dividend distribution, and the analysis is according to different years and different sub industries. Then we make several conclusions regarding the financial listed companies’ cash dividend distribution: dividend distribution methods are diversified, cash dividend distribution is the main method; cash dividend per share rises steadily; cash dividend payment rate is low;cash dividend is distributed continuously and differently within different sub industries.The fourth chapter is the empirical analysis of financial listed companies. We analyze the effect of cash dividend policy for firm value. In this chapter, we propose hypothesis which is based on the theory analysis above. Then referring to relevant literature, we select research variables, describe sample selection and data sources. After constructing research models, we make descriptive statistics, do multicollinearity test.The result shows that there is no multicollinearity, base on this we do regression using weighted least squares and put forward two hypotheses: one is whether listed companies distribute cash dividend in the previous year has a positive correlation with firm value this year. Namely, listed companies that distribute cash dividends in the previous will have greater value this year. The other hypothesis is that cash dividend payments of listed companies in the previous year has a positive correlation with firm value this year,that is listed companies with more cash dividend in the previous year will have greater value this year. Besides, the paper points out that firm value have a positive correlation with total rate of return on assets, net profit growth rate, and largest shareholder ratio.And there is a negative correlation between companies’ value and asset-liability ratio,firm size.The fifth chapter is conclusion and suggestions. In this part, the paper makes a conclusion about the empirical analysis and its results. Be based on the present situation of the financial listed company’s cash dividend policy, the paper gives policy recommendations from the perspective of listed companies and government.