Research On The Motivation And Effect Of S Company’s High Cash Dividend Policy

In recent years,China’s capital market has expanded and improved its quality,and its investment attractiveness and global competitiveness have continued to improve,beginning to enter a high-quality development channel.At the same time,the legal supply has increased,and the legal environment and market supervision system have been improved,so that the reasonableness and standardisation of profit distribution of listed companies have been further enhanced.As an important element of corporate financial management and a hot topic of academic research,dividend policy has always been of great concern to management,investors and regulators.The form,scale and frequency of its distribution affect the management of enterprises,and also reflect their financial status and development prospects.From the "semi-mandatory dividend policy" to the introduction of the new securities law,the SFC has further refined the profit distribution obligations and specific arrangements for listed companies,and many companies have responded to the policy by increasing the scale of payouts,resulting in the emergence of many "high payout" companies.Company S is a typical representative of these companies,which has important research value and significance.This thesis firstly compares the academic literature on the development of dividend theory,the motivation and effect of cash dividend policy and high cash payout related research,in order to prepare for the subsequent writing.Secondly,based on signaling theory,principal-agent theory,tunneling theory and life cycle theory,this thesis builds up a research idea and framework based on literature research,case study method and event study method,and defines the concept of "high payout".Finally,based on the actual situation of Company S,the thesis considers the motives and effects of Company S’s high dividend payout policy by collecting and collating relevant data,analysing financial indicators and comparing industry averages.It was found that the dividend distribution of Company S is characterised by cash dividend,a high dividend payout rate and continuous and stable dividend distribution;in terms of motivation,the internal motivation lies in considerable profitability and abundant cash flow,maturity and lack of investment opportunities,and catering to the interests of major shareholders;the external motivation lies in releasing positive signals to the market and high industry concentration;in terms of effect,it was found that the implementation of high cash payout policy by Company S In terms of effects,it was found that the implementation of a high payout policy by S companies may have a negative impact on some of their financial capabilities,with limited effect on enhancing corporate value,and the resulting market reaction is two-sided.The findings suggest that the necessary guarantee for a company to implement a high dividend payout policy is strong revenue generating power,and that while releasing positive signals to the market,it may also imply undesirable risks,causing negative impacts on financial capacity,corporate value and market reactions.Therefore,based on the results of the analysis and the actual situation,this thesis puts forward relevant recommendations,including: optimising the governance structure,strengthening market supervision and scientifically formulating dividend policies.It is expected to provide reference for other listed companies to optimise their dividend policies,and provide ideas for the management to regulate the profit distribution behaviour of listed companies and guide the rational decision-making of investors,so as to promote the sound development of capital market transactions in China.