The Relationship Of Free Cash Flow,Cash Dividend And Maximize Shareholder Wealth In SH Company

Dividend distribution is one of the three core contents of Modern Corporation’s financial activities. Listing Corporation through the dividend policy of the allocation of profits or reinvested. There are two forms of dividend distribution in China’s listing Corporation:cash dividend and stock dividend. Dividend distribution policy is of great significance for the listed company’s management and future development, so on the dividend policy of the listed companies were hotspot research in recent years, has important theoretical and practical significance. And in our actual economic environment, for a listed company, free cash flow of cash dividend would affect the and free cash flow as a cash dividend payment to shareholders whether can encourage enterprises to realize the maximization of shareholder wealth financial management goals, influence the cash dividend distribution of whether there are other more important factors, are worthy of our consideration and research of the return.Firstly, in this paper, the theoretical analysis and combined with the theory of enterprise life cycle, a listed company SH division of the life cycle analysis, using event study methodology of declared to distribute dividend event period abnormal return rate and cumulative abnormal returns are calculated, and the single sample t value test method to examine the declared to distribute cash dividends on shareholder wealth have significant impact. Combined with SH company’s life cycle, using the trend chart analysis method and SPSS verify that free cash flow and cash dividend relationship analysis, found that in addition to the free cash flow is still the rest of the factors in the amount of influence the cash dividend payment, so the use of correlation analysis and stepwise regression analysis method of combining, to extract the factors having the greatest impact on the cash dividend. Finally, the research and analysis of the abnormal points in the financial data generated by the financial data of SH company in recent years.The results show that the declaration of cash dividends has a significant effect on the wealth effect of shareholders. During the period of 2010-2000,,that is, the growth period of SH, free cash flow and cash dividend has a significant positive correlation, but in the last few years after 2010, showed a more serious negative correlation. And regression results show that, compared to free cash flow, the impact on the cash dividend is a greater financial indicator is the basic earnings per share. Conclusion:free cash flow has a significant positive correlation with cash dividend, and cash dividend is helpful to improve shareholder wealth effect and achieve the goal of financial management.