Research On The Motivation And Economic Consequences Of Saic’s High Cash Dividend

The dividend policy of listed companies has always been researched and concerned by domestic and foreign scholars and investors.In recent years,with the promotion of a series of semi-mandatory dividend distribution policies issued by the China Securities Regulatory Commission and the deepening of the public’s emphasis on investor returns,more and more listed companies have joined the team of dividends,and cash dividends have gradually become the mainstream of dividend distribution.At present,listed companies which carry out high cash dividend are becoming more and more common.Some listed companies do not even consider their actual situation to implement high cash dividend,this not only increases the company’s own financial pressure and financial risks,but also causes adverse effects on the company’s future development.Therefore,the reasons behind the high cash dividend of listed companies and their impact are worthy of attention and research.This article mainly uses the literature research method,case research method and event research method to analyze the reasons and economic consequences of SAIC Group’s continuous high cash dividend.First,the paper reviews the domestic and foreign research on dividend policy and the influencing factors of corporate cash dividends,defines the concept of dividend policy and high cash dividends,and introduces the relevant theoretical basis of dividend policy to provides theories for the rest of the article.Secondly,according to the implementation of the dividend policy of SAIC Group over the years,it summarizes the characteristics of its dividend distribution,and analyzes the motivations of SAIC Group’s high dividends from both internal and external aspects,finding that the high cash dividend of SAIC Group is connected with profitability,equity structure,cash flow status,life cycle,and related macro policies.Third,analyze the economic consequences of SAIC Group’s high cash dividend from three aspects: financial effect,market reaction and enterprise value.Through the research,it is found that in terms of financial effects,SAIC’s high cash dividend has leaded to limited growth of the company,increased external financing needs,reduced debt solvency,and rise the second type of agency costs,but it has also been found that the superiority of operating capacity in the industry are stable,and the first type of agency costs have also been reduced;in terms of market reaction and the corporate value,it is found that the short-term market reaction of high cash dividend varies in different years,the long-term market reaction is relatively flat,and the corporate value has not been improved.Finally,according to the above research,the following conclusions are drawn: adequate capital accumulation and shareholders’ wishes are the key to the high cash dividend;the financial effects of high cash dividend are two-sided;high cash dividend may not necessarily be able to bring positive market reaction;and high cash dividend does not necessarily enhance corporate value.Through the research of this article,expecting to enrich the domestic theoretical research on high dividend policy,provide references for relevant regulatory authorities to improve the dividend system,and provide direction for listed companies in formulating dividend policies,at the same time,guide investors to establish correct investment concepts,and promote the orderly development of domestic capital market.