Studies On The Causes And Economic Consequences Of Ultra-capability Dividents Payout Of C&D Inc.

Companies' dividend policy has been a hotspot issue in the theory research recently,and it is also one of the core focuses of corporate financial management.Before 2000,in China's capital market,there were comparatively few public companies practically issuing dividends or having the awareness of rewarding small and medium shareholders cash dividends.To change this situation,since 2001,the CSRC has issued a series of policies and measures guiding and encouraging public companies to distribute their cash dividends.The combination of refinancing requirements and cash dividends led many public companies to increase their proportion of cash dividends.Furthermore,a great number of public companies accordingly neglected their cash flows and operating conditions,which finally brought about the problem of ultra-capacity dividends payout.Excessive capital outflow will inevitably affect the company's normal production and operation activities and it is not conducive to companies' sustainable development in the long run.Based on this point,beginning with and studying into the C&D Inc.case,this paper has deeply analyzed the reasons and economic consequences of its ultra-capacity-dividend-payout activity since this company's getting public in 1998.This paper fiures out that,first of all,the major factors that trigger C&D Inc.to conduct ultra-capacity dividend payout,includes the centralized and imbalanced structure of stock equity,self-interested behaviors by executives,struggles to be qualified for allotment of shares,and financial pressure from the actual controllers.Secondly,ultra-capacity dividends payout cannot bring about positive effects in the market while it infringes on the interests of small and medium shareholders.In addition,from the perspective of finance,a long-term ultra-capacity dividends payout will increase the company's financial risk and affect its sustainable development.In the last part,this paper proposes a host of measures from two aspects comprising external supervision and internal governance,in order to not only offer ideas for the authorities to improve the dividend distribution policy and regulatory measures,but also provide some feasible suggestions for public companies in terms of optimizing their governance structure.