Research On The Dividend Distribution Policy Of YGSOFT Listed Corporation

In recent years, The dividend distribution policy of listed company in China hasbecome the focus of attention among the majority of investors and regulators, sincemany companies went public, many companies have long been implementing a lowcash dividend payout ratio policy, in good profit and strong cash flow situation, thereare still " accumulated more and distributed less," or even "non-profit distribution".And in many listed companies of our country, there are many different dividenddistribution forms,such as cash dividends, stock dividends and the transferof reserve to common shares, stock dividend often become an alternative means ofcash dividends. As a result, the dividend policy has often become in a lack ofscientific character, continuity and stability. Those phenomenon of dividenddistribution has become chronic problems of the capital market in our country. Thiswill seriously restrict the healthy development of capital market in China, and affectthe investors’ investment confidence and long-term interests of theenterprise.Therefore, it is necessary for our listed companies to analyze the presentsituation and problems of dividend distribution policy, the listed companies usuallyhope to maintain a low level of cash dividends,and result in a lack of continuity andstability in the dividend policy,it is necessary for us to dig out the deep-seated reasonsand find out the improvement strategies, combine with its own conditions to developa set of scientific,reasonable dividend distribution policy options. Through theissuance of cash dividend, we can balance the returns of shareholders and theenterprise long-term development. To reduce the speculation of investors in our capital market.Eventually we can promote the development of the capital marketorderly and maintain long-term interests of the enterprises.Based on the dividend distribution data of YGSOFT Listed Company in2006-2013as the research sample, first, by using descriptive analysis,comprehensively and systematically analyzed the problems of dividend distributionpolicy adopted by YGSOFT since going public. From the dividend payment ratio andthe overall trend of change,we can find out the company’s the existing problems ofdividend distribution policy: low level of cash dividend payments,dividend distribution of arbitrary large, the lack of continuity and stability.Inaddition,through comparative analysis, we choose UFIDA Software Co.Ltd as acomparison because the company has implemented a high cash dividend policy in theindustry for a long time,to calculate the dividend yield on the two companiesrespectively.This shows YGSOFT ’s cash dividend payout ratio is low, investors needto recover the investment cost for a long time by the way of cash dividend, we candecide that the YGSOFT ’s cash dividend payout ratio is not high compare to othersin the industry.In order to recover the invested capital,investors have to get capitalgains through stock trading,which contributed to the investors’ speculation in themarket.Eventually, Through the literature analysis method,refe to the previoussummaries of scholars and find a dividend distribution scheme,which is suitable foritself.In the condition of good profit and cash flow,the company should give backshareholders by cash dividend, to protect the interests of minority shareholders andestablish a good image of the enterprise.With relevant literature review, there are many reasons contribute to the existingDividend distribution policy problems,such as the company’s internal controlproblems is serious, the financing channel is single,and the research products havehigh degree of dependence on electric power industry, earnings growth ability isvolatile. Combining the theory of predecessors,the paper put forward its own views in choosing the form of dividend distribution policy,based on the liabilitycondition,profit model and investment opportunities: First,we can ensure thecontinuity and stability of dividend payment by the policy of low cash dividend plusdividend extra mode.Second,we can also use the stock repurchase, the specialdividend form, to reduce excess cashes and agency costs between shareholders andmanagement, and to adjust the financial leverage and optimize the capital structure.The company should also pay attention to the positive signal which dividend policybrings us, and play its proper role in the capital markets in order to stimulateinvestment enthusiasm of investors and stabilize share price. Finally, we can realizethe value maximization goal of the company.Through the study of dividenddistribution policy in this paper, we hope to help those companies which have similarproblems to regulate dividend policy.The solution will be reference for them.