Analysis On The Causes And Effects Of High Cash Dividend Policy Of Zhengzhou Yutong Bus Co.,Ltd.

The cash dividend policy is a policy for enterprises to distribute the net profit among the owners,which mainly refers to the distribution of the net profit to the shareholders and the retention of the company.Cash dividend has long been concerned by people from all walks of life.It is the core content of dividend distribution.On the one hand,it has an impact on the interests of shareholders and creditors of enterprises,on the other hand,it also affects the growth of enterprises.Some listed companies have abnormal cash dividend phenomenon.Cash dividend exceeds the company's cash flow status and profitability.Some listed companies have symbolic cash dividend or non-cash dividend for many years.The financial behavior of some listed companies shows a certain degree of particularity.In recent years,the Securities Regulatory Commission has issued a series of regulations on cash dividend allocation for non-cash or low-cash dividend allocation,but there are few regulations related to the high cash dividend allocation of listed companies.Because the cash dividend policy of an enterprise is formulated by various stakeholders in different forms,the dividend policy of an enterprise will affect the interests of the owners,creditors and managers of the enterprise.However,there will be some conflicts of interest among the stakeholders involved in policy-making.They may manipulate the formulation process of cash dividend distribution policy in order to maximize their own interests,which will infringe the interests of other investors.The interests of small and medium-sized investors in enterprises will suffer losses because of this behavior,and the healthy and orderly development of capital market will also be caused by this behavior,and also adversely affected the healthy and orderly development of the capital market.This paper adopts the methods of case study,literature research and comparative research,and takes Zhengzhou Yutong Bus Co.,Ltd.as the research object,analyzes the hidden motive behind the behavior of continuous high cash dividends for many years,and analyzes the financial consequences?the change of enterprise value and market response of high cash dividends.It is hoped that through the analysis of Yutong's high cash dividend case,it can provide a direction for enterprises to formulate reasonable cash dividend policy,and provide useful discussion on improving and promulgating relevant policies to protect the self-interest of small and medium-sized investors in enterprises and strengthening the supervision function ofsecurities market..First of all,this paper defines the concept of dividend policy,and introduces the evaluation indicators of the post-effects of high cash dividends and agency cost theory,signal transmission theory,dividend catering theory and hollowing theory,provide theoretical basis for later case analysis.Secondly,taking Zhengzhou Yutong Bus Co.,Ltd.as the research object,the company's current dividend policy is studied.And compared with the dividend policies of other companies in the same industry,it was found that Yutong has a high frequency of cash dividends and even a phenomenon of "super-capacity" dividend.Thirdly,the reasons for the high dividend policy from both inside and outside of the company are analyzed.It is found that the main internal reasons for high dividend are as follows: the ownership structure dominated by one share of an enterprise is the basis of high dividend;the high government subsidies provide financial support for high dividend,the need for management buy-out fund recovery;and the conveyance of controlling shareholders' interests.There are also some external reasons,such as better development of the industry,high cash dividend to convey good information,enhance the value of enterprises,regulators to encourage high cash dividend and institutional investors to favor high cash dividend.Through further analysis of the late financial effect,enterprise value and market reaction of Yutong's high dividend,it is concluded that in the late financial effect,the current high dividend has brought negative impact on the overall financial operation of the company,resulting in increased external financing demand,reduced operational capacity and insufficient consideration of investment opportunities,affecting the company's growth.In terms of enterprise value,from the perspective of Tobin Q value,the high dividend policy not only does not enhance the value of the enterprise,but also reduces its value;from the perspective of market reaction,the reduction of the excess cumulative return rate of the company's stock five days before and after the announcement of the cash dividend plan also reflects the dull response of the market,which shows that the market effectively identifies the controlling shareholders' diversion of company resources through dividends.The purpose of this cash dividend policy of Yutong is not able to effectively convey a positive signal to the market,even a negative news to the market.The conclusion of this paper shows that the premise of high cash dividend is good business performance.Zhengzhou Yutong Bus Co.,Ltd.has good profitability,high efficiency of asset use,but great pressure of debt repayment.In a word,Yutong hascertain ability to pay high cash dividends.However,high cash dividend become an important means of conveying the interests of Yutong major shareholders,and will lead to refinancing,infringe on the interests of small shareholders,which is not conducive to the long-term development of enterprises.In this regard,this paper puts forward the following suggestions for improvement: Firstly,enterprises should rationally determine cash dividend distribution rate,reduce dividend payment rate or adopt mixed dividend policy according to their own conditions;secondly,establish and improve voting mechanism of shareholders' meeting,implement cumulative voting system to enhance the voice of small and medium-sized investors,improve information disclosure mechanism of high dividend payout,and disclose the behavior of large shareholders;thirdly,we should further improve and promulgate dividend-sharing policies and supporting policies,introduce collective litigation system to protect the rights and interests of small and medium-sized shareholders;fourth,give full play to the role of institutional investors in the formulation and implementation of corporate dividend policies,Institutional investors should be encouraged to play an active role as shareholders,actively participate in the development of listed companies,and strive to bring their professional strengths into full play;fifth,encourage enterprises to choose lower-cost internal financing.