Cash Dividend Policy Study Of Listed Companies Based On Signaling Theory

Dividend policy is one of the three financial management decisions of listed companies. It is cared for by investors and market as an assignment of business income, and is very important to the financial operation of the companies. An appropriate dividend policy can inspire investors to continuously invest in the company, which enables the company to obtain a long-term and steady developing condition and opportunity. The signal transmit theory of dividend policy believes dividend distribution can be a kind of effective tool that transmits internal information of listed companies. Cash dividend is one of the most important dividend. The listed companies which adopt the way of cash dividend distribution companies are more and more increased. In this context, China's cash dividend policy is a signaling effect is worth studying.For the immaturity of securities market in China, dividend policy hasn't been paid attention to. Therefore it makes sense to research the dividend signal theory's applying to China Securities Market. This research shows that the signal effect of dividend policy does exist in our stock market, but differs from western stock market in information content and market reaction.From the viewpoint of the signaling transmission effect, this paper studies empirically on the cash dividends of the listed companies in China. My analysis mainly focuses on the signaling transmission effect of the cash dividend policy in the listed companies. The research shows that the signaling transmission effect has something to enhance in China. Finally, according to empirical conclusion, I will give some advice which may help us make the cash divedend's signaling transmission effect of the listed companies perfect. Therefore outer investors can use the cash dividends as a tool of forecasting future development of the listed companies in China.