Research On The Unusually High Cash Motivation And Economic Consequences Of Kingclean

In the early stage of the establishment of China’s securities market,the system construction was not perfect,and the listed companies unwilling to pay dividends in the capital market accounted for the majority.Since 2008,in order to protect the interests of small and medium-sized investors,the state has introduced a series of policies to restrict the cash dividend behavior of listed companies and set the minimum limit of refinancing dividend to give investors immediate benefits.Under the guidance of the regulatory authorities,the enthusiasm of the listed companies is high,and the scale,frequency and proportion of dividends have been significantly improved.However,with the continuous regulation of dividends,many listed companies began to implement unusually high dividend distribution policy,which can establish a better corporate image to a certain extent.At the same time,it will also reduce the retained earnings of enterprises,which will affect their daily operations,development and transformation,which is not conducive to the long-term development of enterprises.Therefore,in order to the sustainable development of enterprises,it is urgent to study the causes and economic consequences of the abnormally high payout of companies.Taking Lake Electric as the case study object,this paper analyzes the internal and external drivers of Lake Electric’s abnormally high payout based on the principal-agent theory,signal transmission theory and life cycle theory by combing and summarizing the literature on dividend policy at home and abroad,and finally uses event research and comparative analysis to study the economic consequences of abnormally high payout from three aspects: market response,corporate financial activities and financial performance.This paper combines theoretical analysis and case study to draw the conclusion:firstly,the motivation of Lake Electric’s abnormally high cash distribution is divided into internal and external levels.The internal motivation is generated by the company’s cash distribution ability,shareholders’ rights,investment opportunities and the controller’s capital needs.The external drivers are driven by national policy,market signal,competition degree and dividend policy system.Secondly,the economic consequences brought by Lake Electric’s abnormally high dividend are reflected in three aspects: market reaction,financial activities and financial performance.First,the announcement of Lake Electric’s abnormally high dividend policy does not deliver a positive signal to investors,nor is it relevant to the improvement of the company’s value.Second,the abnormally high payout of Lake Electric has caused the problems of tight cash flow and insufficient investment in the critical period of transformation and development,which is not conducive to the implementation of the company’s strategic development.Third,Lake Electric’s unusually high payout is now leading to increasing financial pressure,late growth is weak.In view of the problems found in the research,this paper puts forward three enlightenments: first,standardize the dividend policy and improve the governance system;Second,optimize the ownership structure and improve the checks and balances mechanism;Third,based on long-term goals,the pursuit of long-term value.It is expected to provide some reference and enlightenment for the listed companies and relevant supervision departments to implement the unusually high dividend policy.