A Case Study Of Free Cash Flow And Dividend Choice

Dividend distribution policy is an important part of financial management of enterprises at the present stage.Appropriate dividend policy choice can play a role in optimizing the capital structure and reducing the cost of capital.Studying the dividend policy of listed companies is of great significance to the long-term development of enterprises and the investment choice of investors.The choice of dividend policy is affected by many factors,among which the company's free cash flow has a great impact on dividend policy.In recent years,more and more scholars have realized the scientific nature of life cycle and used it to analyze how to choose the most suitable dividend policy for enterprises.The cash flow generated by an enterprise in different life cycles is not the same.Therefore,it is necessary to study the correlation between the free cash flow of an enterprise in different life cycles and dividend policy choice,so as to find out a better dividend policy choice scheme.Were reviewed in this paper,on the basis of relevant research results at home and abroad,application of free cash flow hypothesis,dividend policy theory,enterprise life cycle theory,case analysis and theoretical analysis method of combining research methods,draw lessons from international experience,combined with the actual situation in our country,from the perspective of enterprise life cycle to our country enterprise free cash flow and the choice of dividend policy.The research content includes the following three parts: the first part is the theoretical analysis,that is,the introduction of free cash flow,dividend policy and enterprise life cycle at home and abroad related research and related theories;The second part is the case study,which divides the life cycle of gree electric appliances,calculates the free cash flow of each life cycle,summarizes the dividend distribution mode of each life stage,and studies and analyzes the relationship between free cash flow and dividend policy choice.The third part is the countermeasures andSuggestions.Based on the research on the relationship between free cash flow in different life cycles of gree electric appliances and dividend policy choice,the thesis puts forward Suggestions and prospects on how to choose dividend policy of listed companies.Through research,this paper draws the following conclusions: in general,the higher the free cash flow within the enterprise,the higher the amount of cash dividend payment;For an enterprise in the initial stage,the internal free cash flow is positively correlated with the amount of cash dividend payment,but the correlation is not high.For enterprises in the growth stage,the internal free cash flow is positively correlated with the amount of cash dividend payment,and the correlation is relatively high.For listed companies in the mature stage,the free cash flow is positively correlated with the amount of cash dividend payment,with a high degree of correlation.