| Dividend policy is the decision made by the company to distribute the income after tax between shareholder and retained income. For one thing, as an extension of corporate investment and fundraising activity, dividend policy reflects a company’s business performance over the past period, and for another, it suggests future development strategy and growth potential of the company. Meanwhile, with dividend as an important means of rewarding investors, the change of dividend policy will directly influence shareholder’s economic benefits and alter investors’expectation for a company’s future value, which will thus affect the company’s market value. The market effect is specifically embodied in the change of corporate share price resulting from the release and implementation of dividend policy.Many domestic and overseas scholars find that the formulation and implementation of dividend policy by listed companies can exert an influence on share prices of listed companies. In China’s stock market, what will be the market effects caused by dividend policy? This paper takes for example the dividend distribution plan of5955listed companies of Hu-Shen A-share during2006and2010crossing a cycle of Bull and bear markets. It compares the market influence of different dividend policies on share prices and carries out test of significance for the analyzed results by means of T-test. The findings show that first, dividend policy can produce market effects, and meanwhile, different market policies will exert different influence on the share prices of listed company; second, dividend policy can significantly boost the rise of share prices in the short run; third, compared with dividend plan of low proportion, dividend plan of high proportion exerts an insignificant influence on share prices; forth, on stock right registration date and two days before registration date, dividend policy produces an insignificant market effect; fifth, share allotment plan exerts a positive influence on share prices of listed company.This paper comprises four chapters: The first chapter is about introduction. It describes the topic selection background, research objectives, significances, ideas, and methods, and the overall structural arrangement of this paper.The second chapter is about literature reviews and status analysis on China’s listed company. First, it summarizes the theories concerning domestic and overseas dividend policies. Second, it goes over the development process of dividend policy of listed companies of A-share market in recent years. Finally, it makes an analysis on the current situation of dividend policy.The third chapter is about empirical studies. This chapter proposes research hypotheses, determines the empirical research methods, and analyzes the selected sample. Meanwhile, this paper takes the share price information of the listed companies that employ dividend policy, share allotment plan and dividend plan of different proportions as research object. On this base, it sorts out the final data required by analysis.The fourth chapter is about empirical results and inspiration. This chapter applies statistical soft wares including EXCEL and SPSS to carrying out T-test analysis. Based on research outcomes, it comes up with some suggestions for the formulation of dividend policies of listed company, investor’s investment decisions, and market regulation methods. |
