The Case Study Of The Reasons Why High Percentage Of Cash Dividend Distribution On The Yonyou Network Co.,Ltd

As one of the most important part of the company’s financial management issues,dividend policy and related problems have been paid attention by many scholars.The dividend distribution of a company,in particular,the cash dividends,usually is backed up by good current operating conditions and the company usually have sufficient cash.So,it can be seen as a signal of good performance to the shareholders.However,on the other hand,dividend payments will reduce the company’s cash,so some companies tend to use the retained funds for expansions and acquisitions instead of dividend in order to pursue a better development.In addition,if the dividend policy is stable,it can affect the judgment of investors,and then their investment behavior will be changed and ultimately the development of the company will be affected;if there is a dominant shareholder,and he use the dividend policy to transfer cash for himself,so dividend policy may also damage the interests of minority shareholders,and ultimately affect the value of the company.Therefore,the contributory factors of the dividend policy of listed companies are worth exploring,and how the dividend policy affects the development of the listed companies is also worthy of our attention.In China,the dividend payout ratios of listed companies are not high and companies are inclined to allocate stock dividends since we start late and some related policies are constrained.However,there are some company,whose cash dividend payout ratio is very high,even excessive.Among them,the Yonyou Network Co.,Ltd performance was outstanding.Therefore,this paper chooses it as the case study,takes the distribution of high cash dividends from 2001 to 2016 as examples,combined with industry data,uses signal transfer and dual principal-agent theory,empirical analysis and makes a variety of financial ratio comparison,to explain the company’s high cash dividend payout policy the reasons and to explore its rationality.The following conclusions are drawn:(1)Because of the ownership structure of Yonyou,this paper focuses on the second kind of agency problem of the company.Through further analysis,this paper holds that the non-circulating nature of the stock held by the controlling shareholder leads to the use of cash dividend infringed the interests of small and medium shareholders,which is the main reason for the early dividend policy;(2)For the situation after the completion of the split share structure,the company cannot prove that all aspects of the company can prove that there is a big shareholder "emptying" behavior,and by analyzing the control and ownership of the controlling shareholder,this paper argues that during this period,compared with the ways to "grab" private benefits,the controlling shareholder more preference for cash dividends such a shared income,thus explaining the current high-current policy.(3)In addition,Yonyou’s high cash dividend distribution can deliver positive signals and bring positive effects,which is likely to lead the company in order to meet the psychological preference of investors to maintain the dividend distribution.