Research On Causes And Consequences Of High Cash Payment In Poly Development Under The Shortage Of Net Operational Cash Flow

Dividend policy is a financial decision of an enterprise to dispose of its profits in that year.Reasonable dividend distribution policy not only provides a source of capital for the expansion of enterprises,but also helps enterprises to establish a good image and enhance the value of enterprises.China’s securities market is still immature,laws and regulations are not perfect,which makes the non-standard dividend policy occur frequently,such as the current high-profile behavior of enterprises.China’s real estate industry belongs to the "iron cock"more enterprises,the dividend policy of real estate listed companies is discontinuous and unstable,and the amount of cash paid by enterprises is generally low.In this case,this paper will explore the causes and consequences of abnormal high cash dividend behavior of a real estate listed company.Poly Development Holding Group Co.,Ltd.(hereinafter referred to as "Poly Development")is one of the top five state-owned listed enterprises in the real estate industry,which has developed rapidly and achieved excellent results since its listing.However,Poly’s development has been in short cash for many years since its listing in 2006.Generally speaking,high cash allocation will cause a large amount of cash outflow,resulting in the lack of follow-up operating funds.Long-term implementation will probably seriously affect the healthy growth and sustainable development of enterprises.However,the long-term high-profile current behavior did not cause the decline of Poly’s development,on the contrary,the enterprise upstream,showing prominent performance.Therefore,what is the motivation of the high dividend of Poly’s development and what economic consequences will this behavior bring to the enterprise?And how should companies,regulators and investors deal with high dividends?All of these are worthy of further study.In view of this,this paper adopts the way of case analysis,summarizes and discusses the literature research and related theories of high dividend payout,focusing on the motivation of the development of high dividend payout and its positive and negative economic consequences.Firstly,the main motivation of Poly’s continuous implementation of high cash dividend policy in the case of shortage of net cash flow from its business activities is that,under the condition that enterprises achieve a certain level of profitability,the implementation of high cash dividend policy can match the financial strategy of enterprises,cater to the needs of controlling shareholders,transmit good signals to the market and meet the requirements of laws and regulations on the dividend policy of listed enterprises.。The results show that the market reaction of high dividend payout is cold,and the stock price fluctuates irregularly.The positive economic consequence of high dividend payout policy is that it can make the development of Poly get corresponding funds,reduce the agency cost between shareholders and managers,and establish a good investor relationship.However,the high cash dividend policy of Poly development also has some negative effects:it infringes the rights and interests of minority shareholders in Poly development,the capital chain of enterprises is too tight,and it also destroys the fair competition environment of the real estate industry to a certain extent.Finally,according to the conclusion of the study,this paper puts forward some suggestions on how to deal with the high cash dividend of enterprises.