Research On Factors Influencing Dividend Policy Of SAIC Motor

Investment decision,financing decision,operation decision and dividend distribution decision are the four core parts of modern enterprise financial management.Dividend decision is a consideration of whether an enterprise distributes its profits or retains them for reinvestment.It matters how the enterprise balance the interest groups and influences the long-term development of the enterprise,and its making is closely related to the other three decisions.SAIC Motor is the largest automobile group in domestic production and sales,as well as the largest automobile listed company in market value of domestic a-share market.Since it listed in 1997,the company has mainly insisted in cash bonus,with 18 times of totaling 101.8billion yuan.From 1997 to 2001,the company distributed dividend mainly in the form of stock dividends,to expand capital stock through donation and allotment of shares,with more retained earnings.Therefore,the company should be newly established in this period.It preferred to use retained earnings to invest projects,but paid a small number of dividends.From 2002 to 2009,dividend payment rate fluctuated volatile and declined from 84.71% to6.46%.It mainly due to the constant adjustment of the company's strategy,with main business transformed from auto parts to full vehicle.It is growth period in these years.The company constantly adjusted the dividend decisions according to their own operating conditions and long-term development concerns.After 2010,the dividend payment rate rose from 12.57% to61.85%,showing a stable and upward growth trend overall.The company matured in this period.Due to the stable operation of the company,the role of strategic guidance was further highlighted.The company prefers to pay cash bonus in order to send a positive signal to the market.Dividend decisions of SAIC Motor is basically consistent with the life cycle theory of dividends.This paper takes SAIC Motor as case study,firstly through of the relevant provisions of the profit distribution from the company's articles,analyzes whether cash dividend distribution during 1997-2017 complies with the provisions.Compare with the dividend payment of other listed companies in same industry,it comes out that the dividend decisions made by SAIC Motor show the characteristics of this industry.The paper also studies the factors which influence SAIC Motor's dividend decisions from firm level and stockholders level respectively.then expresses personal comments on the effect of the company's dividend decisions.The last is conclusions.Firstly,the strategy guidance of SAIC Motor is the basic factor affecting the stable dividend decisions.Secondly,a good financial capacity is the basicfactor.Thirdly,The rational layout of prospect planning and the level of shareholders are the main factors.Fourthly,the continuous and stable dividend decisions can be explained well by agency cost theory,dividend signaling theory and free cash flow theory.It were welcomed by the market,catered to the needs of investors,and increase the value of the company obviously,and it brought abundant returns for shareholders.Lastly,it provides the following enlightenment from the perspective of the enterprise itself,investors and securities regulators:Firstly,enterprises should adhere to a stable dividend policy within a reasonable range;Secondly,investors should measure and choose dividend policy rationally;Thirdly,securities regulators should strengthen supervision within the law.