An Analysis Of The Causes And Effects Of High Stock Dividends And Splits Without Performance Support

All along,the dividend distribution policy of listed companies has received wide attention from all parties.Since the development of the securities market,listed companies have a variety of dividend distribution forms.Among them,High stock dividends and splits have been sought after by investors in recent years,but they are essentially internal adjustments between shareholders equity,causing no effect the company's operating conditions and other fundamentals.Among these listed companies that implement high stock dividends and splits,there are many companies with poor operating performance.Even so,high stock dividends and splits policy without performance support will still be widely sought after by small and medium investors,which is very different from the value investment concept.Since high stock dividends and splits will not change the company s fundamentals and will not have any substantial impact on the company' s value,why are the high stock dividends and splits of loss-making companies still favored by investors?Is the market' s response to it rational?What are the driving factors for listed companies to announce a high stock dividends and splits policy without performance support?These issues are worthy of our study and discussion.Because the results from multiple case studies are more reliable,and compared to single case studies,multiple case studies are more universal and the conclusions drawn are more convincing.Therefore,this study selects six typical high stock dividends and splits companies with no performance support in China' s capital market as the research object,in order to explore the motivations and effects of listed companies implementing high stock dividends and splits under poor management conditions.This article first reviews the relevant literature,sorts out the relevant literature and theories of high transmission,and then based on the theory of signal transmission,equity expansion theory,catering theory and control income theory,from the environment of high transmission and investors' irrational investment concepts as well as the rational catering of managers and major shareholders,analyze the motivations of the high stock dividends and splits policy and the market effect of it.Through a comparative study of multiple cases,it was found that the external regulatory agency's loose regulatory environment can provide a strong institutional basis,while the high concentration of equity provides high stock dividends and splits without performance support..At the same time,the needs of the managers and major shareholders of listed companies are derived from two aspects.Expansion of equity based on financing needs paves the way for targeted additional issuance,and creates a high price reduction opportunity.It rationally caters to small and medium investors because of stock price illusions and irrational investment ideas produced by group effects.The article also found that in the case of poor performance of the case company,investors still gave the company a positive effect on the day of the announcement of the high transfer,and gave the major shareholders of the listed company to increase the share price and reduce the arbitrage to take advantage of the opportunity..This article's in-depth study of high stock dividends and splits can play a great warning role for relevant companies,and has certain educational significance for market investors.It is also conducive to the scientific operation of capital markets and the construction of a harmonious economic environment.