Whether Dividend Policy Caters To Investors

As one of the core business of Corporate Finance， dividend policy has been theresearch focus of scholars at home and abroad.Since the well-known MM dividendirrelevance theory proposed in1960s，the academic class has gradually relaxed theassumptions of the MM theory and proposed a series of dividend policy theory.Cateringtheory is the resaerch findings after relaxing the relevant assumptions and adding thebehavioral factors， and it researches the dividend decision from the cateringperspective.In the year of2005，China started the Reform of Non-tradable Shares，whichis a major turning point during the stock market’s development and caused the significantchange of stock market environment.This paper has researched the dividend policy of thelisted companies in our country respectly based on the capital market’s environmentaround the Reform of Non-tradable Shares.This paper firstly recovered the traditional dividend policy theory，catering theoryand the reseach of Non-tradable Shares Reform’s effect on the dividend policy of thelisted companies，then made a brief introduction of the Reform of Non-tradable Sharesand the present situation of dividend distribution. Subsequently this paper made atheoretical analysis of dividend policy before and after the non-tradable shares reformfrom the catering theory，and proposed relevant assumptions.Lastly the dvident statafrom2001to2010of A share listed companies in the stock markets of Shanghai andShenzhen which have finished non-tradable shares reform up to the year of2006. Theempirical results show that before the Reform of Non-tradable Shares，in china the cashdividend of the listed companies did not cater to the preference of investors，while thestock dividend did cater to the investors’ preference; After the Non-tradable SharesReform，the cash dividend showed catering，but the stock dividend did not.