An Empirical Research On Dividend Policy Of Listed Companies In Electricity Industry

Dividend policy is an important decision about how the listed company shares their profits with shareholders.Different dividend policies have different impacts on the company development.How to find a balance between profit distribution and profit retaining,and how to choose the best dividend policy become one of most important things that the company has to take into account.Electric power is the essential energy of contemporary economic and social development,so that the electric industry is been considered as the pillar industry of a country.The electric industry is one of the most highly capitalintensive industries, there must be heavy investment to support it's development. China is a developping country that it doesn't have enough funds to meet the whole capital requirement, so the electric industry must solve the problem by attracting investment from capital markets.Dividend policy is an important part of corporate finance, whether the policy is reasonable have much to do with financing. As a result, studing the factors which will affect the dividend policy made by the electric industry listed companies is necessary. The research will help the company to make a correct selection of dividend policy and develop fastly.At the beginning of this paper,we review the dividend policy literature of Chinese and other countries,then based on the peculiarity of dividend policy of the listed companies analyse affecting factors of electric industry:company intra condition, securities market factors,electric industry factors,external environment factors.And then,different from setting cash dividend and stock dividend as dependent variable in many literature, we set dividend summation as dependent variable.Selecting 30 listed companies of the electric industry which come into the Shanghai market and Shenzhen stock market, and doing empirical study with a variety of data of 2007.From the study, it pionts out the primary factors that affect the dividend policy of the listed companies—stock price, net assets per share,debt-assets ratio, ability of growth, liquidity, cash flow per share. At the last of the paper,we make some suggestions based on the result we get from empirical study,and provide a theoretical and empirical support to make a suitable dividend policy.