The Research On Dividend Distribution Policy Of The Red Flag Chain

In recent years,capital market in China has developed rapidly,however,compared with foreign capital market,it has many weakness.For example,in some listed companies,the process of formulating the dividend distribution policy is random,the process of implementing the dividend distribution policy is chaotic,and the phenomenon of no distribution,less distribution and disorderly distribution is not uncommon.At present,with the continuous development of China's capital market,more and more investors begin to pay attention to the dividend distribution policy,and put forward higher demands for its standardization and institutionalization.Therefore,it has strong theoretical and practical significance to study the dividend distribution policy of listed companies in China.Based on the signaling theory and principal-agent theory,this paper expounded the relevant concepts and theories of the dividend distribution policy.Secondly,this paper has taken the Red Flag Chain as a case,introducing the basic situation and equity structure of this company.At the same time,this paper analyzed the plan of dividend distribution of the Red Flag Chain over the years,and summarized its characteristics of dividend distribution policy.In addition,this paper selected two listed companies to compare their dividend distribution policy with the Red Flag Chain.It is found that the Red Flag Chain is more casual in making the plan of dividend distribution,its payment level of dividend is lower than other listed companies,and its profit level of shareholder is also not ideal.Then,in order to find out the problems existing in the dividend distribution policy of the Red Flag Chain,this paper compared the dividend distribution level of the Red Flag Chain with the average level of the Small and Medium Board Market,and put forwarded the problem existing in the dividend distribution policy of the Red Flag Chain from four aspects.According to this,combined with the specific business activities and financial situations of the Red Flag Chain,and based on the financial factors,the governance factors and the strategy factors of corporation,this paper analyzed the causes of the problems in the dividend distribution policy from the perspectives of the profitability,the debt paying ability,the cash flow,the shareholder control,the growth,the investment opportunity and the life cycle.The analysis found that the decrease of the profitability and the cash liquidity of the company are the main reasons leading to a series of problems of dividend distribution policy.The nature of shareholder and the ownership concentration are the fundamental reasons that affect the dividend distribution policy.The weakening of the debt paying ability and the expansion of debt scale also have negative impact on the dividend distribution policy.The strong growth and numerous investment opportunities of the Red Flag Chain are also one of the reasons that affects the dividend distribution policy.Finally,this paper put forwarded some suggestions to improve the dividend distribution policy of the Red Flag Chain.