A Study On The Motivation And Economic Consequences Of Gao Pai’s Existing Dividend Policy

Dividend policy is one of the important decisions of modern enterprise management.Reasonable dividend distribution can resolve conflicts between different interest parties,give back to investors,and form goodwill.Excessive dividend distribution may be a means of conveying benefits to large shareholders.This paper uses case study method,literature research method and event research method to analyze the motivation and economic consequences of Huabao’s high dividend policy.First,this article analyzes the cash distribution situation in China’s A-share market.From the number of cash distribution companies,the total number of cash distribution companies and the proportion of cash distribution companies are on the rise.More and more companies are willing to give back to investors.Judging from the current level,the average cash distribution level of A-share listed companies is low,but the proportion of high-paid cash companies has risen rapidly,especially the proportion of companies with a dividend per share≥1.Second,this article analyzes the dividend policy since 2015.Huabao’s dividend amount in 2016 and 2018 reached a high level of cash dividends,and the cash dividend per share ranked first in the industry.Then,this article studies the motivation of its high-paid dividend policy.From the analysis of financial factors,strong profitability and sufficient cash flow provide financial support for the formulation of high-paid dividend policy.Good debt repayment ability also reflects good operating ability,which strengthened the confidence of creditors and investors.The total dividends far exceeded the company’s actual operating capacity.From the analysis of non-financial factors,Huabao shares belong to a typical "one-dominated" enterprise,and there is a motive for the transfer of interests of major shareholders.This article analyzes in detail the dividend time and the amount of dividends,and combines the investment progress of the raised funds to invest in the project.Based on a comprehensive analysis,this article suspects that the high-distribution policies of 2016 and 2018 are more like the transfer of benefits to major shareholders.Finally,this article analyzes the economic consequences of its dividend.From the market reaction point of view,most investors are skeptical about the purpose of dividends,which has brought negative wealth effects to investors.The market is not optimistic about the company’s current behavior.Reach the level at the time of listing.