On The Reasons And Economic Consequences For The Abnormal High Cash Dividends Of Masterwork Group Co.,Ltd

When the listed companies make financial management decisions,dividend policy has always occupied an important position.However,many listed companies hold a cash dividend policy that they do not pay dividends or pay less dividends.Therefore,after 1999,China Securities Regulatory Commission issued a number of guidelines to guide the cash dividend policy of listed companies.Since then,the phenomenon of non-distribution of cash dividends or less distribution of dividends has eased.And a great number of investors prefer high cash dividends.However,a new problem has arisen along the way.The phenomenon of abnormally high cash dividends is becoming more and more serious.The distribution of abnormally high cash dividends is an abnormal behavior in which listed companies insist on distributing high cash dividends regardless of their own profitability and cash holding power.This behavior is regarded by academia as a method of transferring interests by controlling shareholders and seriously infringe the interests of small and medium shareholders.Masterwork Group Co.,Ltd is a typical representative of distributing abnormal high cash dividends and the corporation even have to rely on external financing for cash to go on its dividend policy.After summarizing and sorting out the domestic and international research results,this paper adopts the case study method,analyzes the motivation of the abnormally high cash dividends of Masterwork Group Co.,Ltd,and analyzes the market reaction of abnormal high cash dividends and the impact on the company's value.After the case study,it was found that the motivation of the abnormally high distribution of cash dividends was mainly based on four aspects: First,the major shareholders used the high cash dividend to encroach on the interests of the minority shareholders;Second,in order to convey the positive signal of good business performance to attract foreign investors' capital injection;Thirdly,its lack of growth ability,insufficient growth is also one of the important reasons for its abnormally high dispatch;Fourth,the country's policy orientation,in the context of China's semi-mandatory dividend policy,many listed companies cater to the conditions of refinancing.The policy of abnormally high cash dividends is issued regardless of the company's profitability and cash holding level.Masterwork Group Co.,Ltd is also one of the representatives.However,the behavior did not bring about the expected market reaction-increasing shareholder wealth,but it played a counter-productive role,leading to a decline in the company's corporate value.Therefore,listed companies should avoid issuing high cash dividends regardless of their profitability and cash holding capacity.Finally,this paper puts forward relevant suggestions based on the specific problems existing in the case companies.It is hoped that these suggestions can play a certain reference role for listed companies and investors,thus playing a role in regulating the cash dividend policy related to China.