Study On The Correlation Of Dividend Policy And Secondary Equity Offering For China's Listed Companies

The dividend policy and financing policy are two main contents of finance management theory and the kernel of the profit distribution for the listed companies. In western countries, an appropriate dividend policy can not only set up a good image for a company, but also inspire the investors to continuously invest in the company, which enables the company to obtain a long term and steady developing condition and opportunity. By using western dividend theories for references, we aim to explore the actual situation and factors of the dividend policies practiced by China's listed companies. Otherwise, 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 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. Through the diagnosis analysis of the scale examination model and the achievement examination model, three suppositions which this paper proposed were confirmed. The stock dividend can enhance the refinancing scale of listed companies. The percentage of stock dividend is to be higher, the operating performance drops more quickly after refinancing.