The Influence Of Dividend Stability On Financing Cost Of Enterprises

Dividend policy has always been one of the three core decisions in corporate finance.However,compared to western developed markets,China's dividend policies show the characteristics of "iron rooster" and "no dividend".China securities regulatory commission(CSRC)has issued the administrative laws on the limitations of new shares of listed companies since 2001,making relevant provisions on the dividend distribution of listed companies.A series of subsequent related laws and regulations were also regarded by domestic scholars as the beginning of "semi-compulsory dividend" and the dividend policy became an important condition to restrict the refinancing of listed enterprises.However,domestic and foreign scholars' researches on dividend policy mostly focus on the level of dividend payment and seldom pay attention to the stability of dividend policy.Since linter established the measurement model of dividend stability in 1956,the related research on dividend stability has become a hot topic in academy.Existing literatures study the correlation between dividend the economic consequences,such as stability and enterprise value,profit forecast and investor attraction.Based on this background,this paper takes dividend signal transmission theory as the theoretical basis,the financing cost of enterprises as the research objects.From the micro point of view,enterprises can effectively reduce the financing cost through the stable dividend policy and alleviate the dilemma of "difficult financing" and "expensive financing",guide enterprises to reasonably formulate dividend policies and enable listed enterprises to maintain the cost competitive advantages.Macroscopically,whether the dividend signal is established or not measures the development of China's capital market.Effective dividend signal transmission process guarantees enterprise's public information is meaningful.The market mechanism enables investors to take the initiative to identify the strengths and weaknesses of the enterprise risk.Thus the market can also get good development.The theoretical basis of this paper is dividend signal transmission theory.Dividend signaling believes that there is information asymmetry in the market and corporate managers have more corporate information.In this case,the enterprise needs to convey business information about the development prospect of the enterprise to market investors by dividend distribution,which is regard as a more credible signal.This paper takes the stability of dividends and the financing cost of enterprises as the research objects for empirical research,and draws the following conclusions :(1)firstly,the stability of dividends has no significant impact on the financing cost of debt but has a positive and significant impact on the financing cost of equity.The higher the stability of dividend,the lower the equity financing cost of the enterprise.Secondly,based on the conclusion of(1),centering on the influence of dividend stability on equity financing cost,this paper discusses the regulating effect of the property right nature of enterprises and the degree of industry competition.We find that(2)non-state-owned enterprises are more affected by dividend stationarity than stateowned enterprises.(3)the more intense industry competition is,the more the influence of dividend stationarity on equity financing cost can be strengthened.Finally,this paper discusses the mechanism of dividend stationarity and finds that(4)a stable dividend policy can reduce the cost of equity by weakening the agency cost of the enterprises.The mediating effect is significant.