The Study On Linkage Between Cash Dividend And Refinancing And Operating Performance For China's Listed Companies

China's listed companies survive and develop on the condition of good financing situation. Because of the narrow financing channels and regulation of IPO, the listed companies have a strong desire for refinancing. Some companies satisfy the refinancing limits of SEC by using dividend distribution, which results in the linkage between dividend policy and financing decision. This paper starts from refinancing and dividend policy, then it finds that companies have extra distribution of ROE in China, that is, "10% "and "6%" of ROE.Companies reduce net assets and increase ROE by paying cash dividend to meet the needs of SEC. In addition, some companies adopt the measure of distributing cash dividend first and financing then in order to raising money. The dividend policy is just an instrument for financing. Moreover, this paper focuses on the operating performance changes of the companies, which use cash dividend to meet the refinancing qualification, and analyze the matters about it. The result shows that these companies experience drastic changes in reported earnings around the time of financing. This paper discusses performance changes by dividing refinancing companies into earning manage and non-earning manage companies. Then it makes a result that earning manage companies show underperformance before refinancing, comparing with non-earning manage companies. However, earning manage cannot perfectly explain the underperformance of listed companies after refinancing. Besides earnings management, financing effect and agency cost, the purpose of company financing and the ways of managing capital after refinancing may cause performance decline.