Financial Report Quality,Cash Dividend Policy And Stock Yield

Since the implementation of the semi-mandatory dividend policy,the number of enterprises paying cash dividends in China's A-share market has increased significantly,the condition of dividend market has improved greatly,but the semi-mandatory dividend policy has been criticized by academics and the industry.We use CAPM and F-F three factors model to study the impact of cash dividend policy on stock yield based on Chinese A-share market.And based on the result of demonstration,we analyze the protective effect of semi-mandatory dividend policy to investors.Then we consider about the information asymmetry between investors and management which may tend to pay no or less cash dividend,thus we apply quality of financial reporting as institution of information asymmetry using Logit and Tobit model to explore the effect of information asymmetry on cash dividend policy.Finally,we straightly use three factors model to explore the effect of quality of financial reporting on stock yield with different dividend policies to apply the improve that CSRC can use it to take charge of company.We find that portfolios with cash dividends significantly bear lower systemic risk than portfolios without cash dividends;the higher dividend yield,the lower systemic risk undertake;while the alpha return is nonlinear in different types of portfolios,specifically,the alpha return rises as the dividend yield increases,but high cash dividends and zero cash dividends also have higher alpha returns.The improvement of the quality of financial reports has a significant positive effect on whether the company pays cash dividends and the increase of dividend yield.The quality of financial reporting can replace the effect of paying cash dividend to bring higher alpha revenue,higher beta risk and higher small size risk.In the mean time it brings higher alpha revenue relative to low quality of financial reporting.In conclusion,inspire semi-mandatory dividend policy is controversial on today's China,we believe that the current cash dividend policy in China's capital market can protect investors' equity returns.And the CRSC should lower the information asymmetry between investors and company management,strengthen regulatory to quality of financial reporting,then improve our A-share company's willingness and proportion on dividend paying indirectly to really protect benefit of investors.