Effects Of Cash Dividends Of Listed Companies To Investors' Interests

This article is mainly researched how do cash dividend impact on market and investors by its asset allocation function, information transfer function and corporate governance functions. Cash dividends is an important form of distributing benefits. In addition, it is an important way that investors direct acquire the investment income in the stock market. Essentially, Cash dividends give investors a convenient opportunity to reconfigure their assets. By their own risk assessment and future prospects for the company, investors can be re-adjusted to the appropriate asset risk-benefit state. Besides, cash dividends can resolve the problem caused by market information asymmetry. The company with stable dividend policy will transfer some important internal information by dividing cash, which influence the investors who interpreting the market information. Cash dividends can also resolve the principal-agent problem, which is a difficulty of modern corporate system. Cash dividends can effectively reduce agency costs and increase the profit of investors. All the functions discourse above depends on the basis of favorable market conditions and fine corporate governance environment. If the market is imperfect, shareholding structure and governance structure is irrational, the cash dividend may become a means of centralized who used deception, occupation outside investors. With the development in the past two decades, China’s stock market has been reforming and improving greatly. Accordingly, in this article, the market is divided into three observation intervals in accordance with the mandatory dividends and equity division reform two events nodes, and different points of them are compared. Using the Shanghai A-share companies as samples, this article focuses on the information content of cash dividends in the stock market after the period of share reform, as well as the impact of cash dividends on investors. The results show that the cash dividend policy of listed companies lack of stability in both6-year and three-year test, the cash dividend fluctuations and lack of smoothness, that negating it contain the information of operations and management of the company and expert of future. In addition, the paper also use turnover as an indicator to measure behavioral characteristics of investors. Turnover and cash dividends regression analysis in panel data model showed that the cash dividend payment reduce turnover significantly. Finally, for the problems in China’s stock market, some corresponding policy recommendations are proposed.