Research On The Relationship Between Dividend Distribution And Corporate Performance

The dividend distribution policy is one of the key components of the company's financial management.A reasonable dividend distribution policy can enhance the company's performance and is beneficial to the long-term development of the company.Good corporate performance can also lead to high cash dividends.Therefore,it is of practical and theoretical significance to explore the relevance of corporate performance and company's dividend distribution.After reviewing both domestic and foreign documents regarding dividend distribution and corporate performance,this paper uses the financial data of the Moutai and Wuliangye since listing as the basis for analysis to conduct this research,combined with theoretical research methods,case analysis methods,and comparative analysis methods.The paper first compares the two companies' historical dividend policy.It then analyzes the performance evolution of the two companies over the years through comparison.Finally,with the help of empirical analysis,we yield the correlation between dividend distribution and corporate performance from the aspects of market performance,economic value added,and financial performance.The major results are as follows:(1)By comparing and analyzing the dividend distribution policy of Moutai and Wuliangye since listing,the study found that the distribution policy of Kweichow Moutai was relatively stable,favoring fixed dividend payment rate or fixed growth dividend policy;the Wuliangye's dividend distribution policy showed characteristics of multiple changes and low payout.(2)From three aspects was the performance of Kweichow Moutai and Wuliangye compared and analyzed:market performance,economic value added,and financial performance.In terms of market performance,the market value of Kweichow Moutai Company is higher than that of Wuliangye,indicating that Kweichow Moutai's operating conditions are better than Wuliangye's.In terms of the economic value added,the EVA of Kweichow Moutai outperforms that of Wuliangye,which can reflect the higher shareholder value of Kweichow Moutai.In terms of financial performance,Kweichow Moutai,overall,is superior than Wuliangye in both profitability,operational ability,solvency,and development ability.(3)By empirically comparing the analyzing the correlation between Kweichow Moutai's and Wuliangye's the dividend distribution and their corporate performance,we found that in terms of market performance,the market capitalization and dividend distribution policies of Kweichow Moutai and Wuliangye do affect each other;the economic value added of these two companies also have mutual influence with their dividend distribution policies;in terms of financial performance,by selecting some commonly used profitability indicators as of financial performance indicators and conducting an empirical analysis of these financial indicators in both current year and the three years,we found that some indicators of financial performance of the two companies have mutual influence with dividend distribution policies.