Research On The Motivation And Financial Effect Of Abnormal High Cash Dividend Of A

In recent years,high cash dividends and abnormal high cash dividends in Chinese stock market has attracted wide attention.Cash dividends,as a way of distribution,is an important part of corporate financial management,which has a profound connection with investment and financing,and is related to the strategy and development of enterprises.Companies are more and more active in sending cash,and send more and more now.However,the definition of high cash dividends is still at a low level,so the definition standard needs to be updated in time.The cash dividend of Company A in 2019 is A relatively typical abnormally high payout,and it is in A period of "transformation".In addition to updating the definition standard of high cash dividends,the paper combined dividend signal theory and agency cost theory to explore the motivation of Company A’s abnormal high dividend,and analyzed the market reaction and financial performance of Company A’s abnormal high dividend by using event research method and related indicators.It is found that there are three main reasons for A company’s unusually high cash allocation in 2019.Firstly,Company A hopes to convey positive signals of future profits to the outside world,improve investors’ confidence and attract strategic investors to join in under the condition of sluggish operation.Secondly,the major shareholders get cash through cash dividends before "exit";Thirdly,the actual controller exports funds through controlling shareholders.As A result,the abnormally high cash payout of Company A not only failed to produce the expected effect among investors,but also competed with the reinvestment of enterprises and had to rely on external financing,which greatly increased the short-term liabilities of the company,led to the rise of overall risks,and finally brought negative impact on the value creation and sustainable growth ability of the company.Therefore,when making cash dividend decisions,listed companies such as Company A should not only consider the amount of profits available for distribution,but also pay attention to the investment demand and potential risks,and should not distribute cash dividends that are incompatible with the investment demand and cash level of the enterprise.Finally,combined with the problems existing in the abnormal high dividend of Company A,the paper puts forward relevant suggestions to investors,listed companies and regulatory authorities,hoping to play A certain reference role in the decision-making of investors and other stakeholders and promote the virtuous cycle of the capital market.