Research On The Influencing Factors Of Stock Repurchase Or Cash Dividend Decision

In recent years,stock repurchases have been widely used by listed companies in China,which has attracted the attention of enterprises and investors,and has become a research hotspot for scholars.Stock repurchases and cash dividends will increase the flow of assets to shareholders and shareholders.Among the many ways to reward shareholders,stock repurchases are gradually considered as an alternative to the distribution of cash dividends.As one of the important ways of dividend policy,stock repurchase is a supplement and improvement of China's dividend policy research.In addition,this study can provide decision-making reference for companies that have planned to implement stock repurchase or issue cash dividends.For investors,they can further understand the characteristics of stock repurchase and cash dividends,help investors make investment decisions,and control the government and supervision.The department's formulation of relevant policies also provides a certain theoretical basis.In this paper,the author first reviews the literature on stock repurchase and cash dividend policies,sorts out relevant theoretical basis,and uses empirical research to analyze more than 700 listed companies.Draw the preliminary conclusions about the influence of historical dividend payment situation,free cash flow,corporate governance structure,profitability and growth on the direction of stock repurchase or cash dividend decision.On this basis,supplemented by case analysis,Joyson Electronics,a company that replaced cash dividends with stock repurchases,compared its financial indicators with comparable companies in the same industry,and came to a conclusion that was basically consistent with empirical research.It is clear that the analysis of the factors affecting stock repurchase and cash dividend decision making has practical significance for large samples or cases.The research shows that the factors that have a negative correlation with the tendency of enterprises to implement stock repurchase instead of cash dividends are: dividend stability over the years,the stability of corporate free cash flow,the concentration of company equity,the proportion of institutional investors,and the size of earnings per share;the factors that have a positive correlation with the propensity of the company to implement stock repurchase instead of cash dividends are: the amount of free cash flow per share of the company,the shareholding ratio of the management,the shareholding ratio of the shareholder's equity and the growth of the company.In addition to the company's own financial characteristics,the market effect of the announcement will also affect the company's choice.In order to achieve the stock price boost effect in the short term,listed companies are more likely to implement stock repurchases.In formulating stock repurchase or cash dividend decision-making,enterprises should fully consider these influencing factors and determine the distribution method that matches the development of the enterprise.