Research On The Policy Of "High Percent Of Split Stock" Of Listed Corporation

Dividend distribution policy is one of important financial decisions of listed companies. Scientific and reasonable dividend distribution policy is favorable for sustainable development of listed companies, and produces reasonable return to the stockholders. In the last few years, Chinese listed companies are keen on “the high percent of split stock”, and the proportion of sending is increasingly higher, it has stunning popularity.The paper analyze the “the high percent of split stock” dividend of Hareon Solar Technology Co. Ltd., it take the distribution policy that 20 shares are sent for per 10 shares in 2014.In order to analyze why “the high percent of split stock” is so popular.Beginning with an introduction of the industry background to lay groundwork for long term potential of company, the paper gathered statistics of the dividend distribution policy of good companies in the same industry and the companies with same proportion of send the stock and convertible in different industries to conclude preliminarily that high proportion of send the stock and convertible is abnormal. Three angles are taken in the paper: listed company, investor and external factors. The possible motives of “the high percent of split stock” by listed companies are analyzed from market effect,liquidity, signal transmission, stock equity structure, capital stock scale. Then the description of underweight behavior of companies, in order to prove that the enterprises with meager profit and losses adopt “the high percent of split stock” is essentially beneficial to themselves.Based on investor hallucination theory and catering theory, it also analyzed that the investors’ pursuit of " the high percent of stock dividend " is the driver for popularity of“the high percent of split stock”, while analysis on external factors, such as hyping of media and organizations, stock market quotation, weak law indemnification and celebrity effect, etc. In the end all of them been proved are the catalyst of " the high percent of stock dividend ". These three indispensible factors constitute a complete set of the chain.Lastly, according to case analysis result, the paper suggested related policy advice for the problems that reflected by “the high percent of split stock” of listed companies,at last, described some limitation of the paper.