Research On The Affecting Factors Of High Cash Dividend Policy Of Chinese Listed Companies

Dividend policy is one of the three core financial policies of modern corporate finance activities, and also one of the unresolved financial problems. Study the factors of how to develop the dividend policy is the key issue of dividend policy research, and it is also the focus of the company’s management and investors. Meanwhile, as Chinese listed companies to gradually increase the amount of the cash dividend distribution, the phenomenon of high cash dividend policy have caused concern. Therefore, this paper aims at providing a significant practical guiding for developing the dividend policy of Chinese listed companies by studying the affecting factors of high cash dividend policy. This article firstly summarizes the literature research of the scholars. Secondly, analyzing the relevant theories of the affecting factors of the Chinese listed companies’ high cash dividend policy from internal factors and external factors. Thirdly, it integrates theory with practice and use the method of case analysis to give a detailed analysis of the affecting factors of Changyu company’s high cash dividend policy through financial position, equity structure, future investment opportunities and enterprise lifecycle. At the end of the article, this paper draws conclusions and makes recommendations on this basis.Based on the results of theoretical analysis and the main findings of the dissertation are as follows:(1) Among the many factors that affect the listed companies’high cash dividend policy, the high profitability accumulated a lot of money which has bring sufficient cash flow is an important prerequisite for its high cash dividends.(2) The change of the equity structure has a decisive impact on its current high cash dividend policy. Meanwhile, the senior management as companies’ actual control in order to achieve their own interests is more inclined to high cash dividend policy now. The "dominance" model of governance may also tend to use high cash dividends to transfer funds.(3) When the company has strong profitability and in the future there has no good investment opportunities, the company will more inclined to choose the high cash dividend policy.(4) Enterprise lifecycle is one of the main factors affecting the high cash dividend policy of the listed companies. When the company is in the life cycle stage of maturity, according to the explanation of the enterprise lifecycle theory, the companies more inclined to a large cash dividends at this stage.(5) According to signaling theory, the companies’consecutive years of high cash dividend policy has become an important ways for delivering the good information to the capital markets. Meanwhile, in order to avoid abnormal fluctuations make adverse effects on the company, the company also tend to maintain the continuity and stability of the dividend policy.(6) The company in order to ensure the smooth progress of the equity restructuring had make a commitment on the distribution ratio of cash, and the proportion of foreign ownership of the company has some impact on the company’s high cash dividend policy.Through the analysis of the case of the high cash dividend policy of Changyu company. The results showed that when the listed companies are formulating the dividend policy, it should consider lots of affecting factors, just like the company’s financial position, equity structure, future investment opportunities and enterprise lifecycle, taking into account the company’s short-term interests and long-term interests to develop scientific and rational dividend policy as a whole.