Empirical Study Of The Cash Dividend Signaling Effect

Dividend policy, as one of the three pillars in a corporation financial management, is alogical continuation of financing, investing activities, also is an inevitable result of acorporation financial management. Proper dividend policy, on the one hand, could provide acheap source of capital; on the other hand, could be helpful to establish a favorable companyimage, attract the potential investors and creditors, encourage the investors' enthusiasm forthe constant investment and build solid base for the extended and stable development of thecompany.From the viewpoint of the signaling transmission effect, this paper studies empiricallyon the cash dividends of the listed companies in China. My analysis mainly focuses on thesignaling transmission effect of the cash dividend policy in the listed companies when theresearch environment of the individual income tax and the equity separate reform changes,especially during these two years. The research shows that the signaling transmission effecthas something to enhance in China.Finally, according to empirical conclusion, I will give some advice which may help usmake the cash dividend's signaling transmission effect of the listed companies perfect.Therefore outer investors can use the cash dividends as a tool of forecasting futuredevelopment of the listed companies in China.