Research Of Stock Splits In China And United States

Stock dividends, also called stock sending, is an important component of the dividend policy. There is two kinds of concepts in china about stock dividends, stock sending and stock splits, the former comes from the company's retained earnings, the other comes from the company's capital reserve, In the United States, share sending, according to the proportion is divided below 25% for stock dividend, more than 25% for a stock splits. In this paper,the research sample of china include the company which send shares and split shares, sample in US include stock dividend,partial stock splits and stock splits.This paper mainly analysis two countries'stock sending behavior on the stock market. The sample selection includes all A shares in Shanghai and Shenzhen from 2001 to 2010, also include main stock in US exchange. The article first compare to two countries'laws and system about stock sending, discuss the dividends selection between two countries. Then the compared the two countries preference to the stock sending behavior of the sending scale and coefficient, discuss the listed company's choice about stock sending. Company in china send shares frequency and sending coefficient is small. Although china tax policy encourage cash dividend, but listed companies and investors still prefer in issuing stock dividend, its reason may be too much speculation in the market and the blind investment. At last, the paper compares the financial index in listed company and performance after stock sending. According the comparison, we can find that the US stock-splits company's financial index is more superior to china company. The difference between them is the relative index is high in china, it may be because of speculation in market. Another difference is average equity is low in china,this may because the US market has strict law about withdrawal, thus share sending company is almost big enterprise. Comprehensive comparison of the two countries'difference, and produce the reasons for the differences and could cause results are deeply analysis and studies. Chaos sending stock may result in deterioration of market investment environment; the blind investment will make investors lose everything. It will also makes listed company equity expansion too fast, if its net profit can't keep up the speed of equity expansion,it will eventually lead to poor performance company flood in the market and it will also threat to sustainable development of capital market. At the end of the paper, we give three angle policy suggestions from market supervision, the listed company improve, investors education.Share sending research at home and abroad are for a single market, basically in the ranks of the "signal theory" and "optimal price hypothesis" two aspects. The two aspects at home and abroad and the research are mature, this paper mainly innovation is the comparison between two markets, using "signal theory" and "optimal price hypothesis" conclusion. Research start from policy comparison, analysis of the two countries guiding about stock dividend, then analysis of the two countries stock-splits number and size, following analysis of financial indicators and the secondary market performance, it is also a verify "signal theory". The paper's weak point is inadequate US financial data, this is because of geographical constraints, a lot of dates need to buy to get, but the data is still reliable. In addition, in the financial data statistics, because there is no standard about reasonable range of financial indicators at home and abroad, the rules of except anomalies of value is basically range up and down 5% of the data,the statistic data may difference from other scholars, I hope we can continue to improve our studies.