| For listed companies, dividend distribution is directly related to the capital structure and the market value. For investors, the dividend distribution decides its investment income. For mature capital markets, dividend distribution of the listed companies not only measures the operating performance, but also provides the investors the basis for making investment decisions. In the mature capital markets, for example, the market in the United States, the cash dividend is the main way of dividend distribution. The dividend payout ratio is relatively stable, which can objectively reflect the value of the company. In comparison, it is the ubiquitous for the listed companies in China not willing to distribute cash dividends, or preferring high rewarding of stock dividend, as well as the ultra-ability cash dividends. At the same time, the profit distribution policy of the most listed companies is a lack of stability and continuity. Furthermore, the phenomenon of allotting the cash dividends is the concentrated, but it is not universal.Although the factors that affect the system of the cash dividend distribution is complicated, I am more concerned about the premise of dividend policy, whether the company has enough cash to repay the investors. An important point of the cash return is the reliability of the future cash flows. Therefore, I decided to select the data of A-share listed companies from2005to2010to do the empirical research on the relationship of the cash dividends and cash flow. From the cash flow perspective, the research includes two aspects, the cash flow and its volatility.The empirical results show that:(1) the correlation of the net operating cash flow and the cash dividends is weakly positive;(2) the correlation of the net investing cash flow and the cash dividends is weakly negative;(3) the correlation of the net financing cash flow after deducting the cash from the investors and the cash dividends is negative, but it is not obvious;(4) the correlation of the net cash flow and the cash dividends is weak positive;(5) the correlation of the cash dividend per share and the cash flow volatility is positive.The innovation of this paper is mainly reflected in the object of the study. Compared to previous studies, this paper describes the relationship between cash dividends and cash flow more detailedly and comprehensively, which considers the real substance of the cash dividend and the intent of the the management who made the cash dividend policy. With the study, the majority of investors can make the right investment decisions. |
