Research On The Driving Factors And Economic Consequences Of High Cash Dividends Of MeiHua Holdings Group Co.,Ltd

At present,some listed companies appear the unreasonable behavior of high abnormal cash payout.The above phenomenon has aroused many scholars’ attention and research.This paper focuses on the high cash dividends of Mei Hua Holdings Group Co.,Ltd,studying the motivation of its current high dividend payout policy and exploring the performance consequences of its high cash dividend policy.This paper adopts the literature research method,case study method,financial index method and event research method,and combines the Bird-in-the-hand theory,Dividend Signal theory,Tunneling theory to study the motivation and economic consequences of the high cash dividend policy of Mei Hua Holdings Group Co.,Ltd.The research shows that the major shareholders of the company achieve the purpose of manipulating the stock price,expand the financing scale of equity pledge and meet the capital needs of major shareholders are the important motivations for the implementation of the high dividend behavior.The research conclusion about the driving factors accords with the Tunneling theory.On the other hand,as for the study of the economic consequences after high cash dividend behavior,this paper makes use of financial index method and event research method to study from two perspectives,these two perspectives include: enterprise finance perspective,market reaction perspective.The conclusion shows that the policy of high cash dividend is not conducive to the long-term development of enterprise.Meanwhile,the current policy of high dividend payout in the recent three years also caused negative market reaction and was not favored by investors.The research conclusion about the performance consequences after high cash dividend behavior does not conform to Dividend Signal theory.Finally,based on the above analysis results,this paper puts forward corresponding suggestions on the governance mechanism and dividend policy formulation of Mei Hua Holdings Group,meanwhile,it also puts forward corresponding suggestions on the regulation formulation of the regulatory department and the improvement of the quality on medium and small investors.