A Study On "The High Ratio Stock Dividend And Stock Splits" Of Listed Companies And The Behavior Of Selling Shares By Major Shareholders

Dividend distribution,as part of the profit distribution of listed companies,is usually one of the important financial decisions of the company.Different distribution methods of dividends will not only affect the distribution of profits,but also affect the market reaction and sustainable development of the company.The listed company shall formulate a scientific and reasonable dividend distribution plan based on the actual conditions and profitability of the company and on the basis of the relevant principles.In recent years,the domestic market has created an upsurge of “the high ratio stock dividend and stock splits”.Listed companies are keen to adopt “the high ratio stock dividend and stock splits” dividend distribution policy,and even when the company’s net profit continues to decrease,it still adopts “ the high ratio stock dividend and stock splits” dividend distribution plan.Generally speaking,the implementation of the dividend distribution plan by listed companies is a signal to investors that the company’s value is undervalued and the company’s development prospects are good.However,along with “the high ratio stock dividend and stock splits” policy,it is followed by large shareholders reducing their share-holdings and obtain high profits.After the completion of the equity division reform,non-tradable shares in the hands of major shareholders become tradable shares that can be reduced in the secondary market to earn high profits.The majority of shareholders usually holds the internal news of the company.Therefore,the majority shareholder can use the internal news to trade for excess profits.Many medium-sized investors not only failed to obtain the proceeds they should have obtained,but also damaged their own interests.Then,is it reasonable for listed companies to implement "the high ratio stock dividend and stock splits" profit distribution policy? Is there a special relationship between “the high ratio stock dividend and stock splits” dividend policy introduced by listed companies and the immediate selling their holding-shares of major shareholders?This article combines China’s current status of "the high ratio stock dividend and stock splits" dividend distribution policy and takes Yun Yi Electric’s 2016 "the high ratio stock dividend and stock splits" dividend distribution policy as a case.It first introduced the company’s profile and reviewed the company’s "the high ratio stock dividend and stock splits" incident.Then analyze the financial status and development ability of the company under “the high ratio stock dividend and stock splits”,whether it is capable of “the high ratio stock dividend and stock splits”,the valuation of the company,the motivation of the company to implement “the high ratio stock dividend and stock splits”,and then analyze the information disclosure and opportunity selection of major shareholder selling their holding-shares.And then analyze the relationship between the company’s "the high ratio stock dividend and stock splits" motivation and the behavior of selling shares by major shareholders to draw relevant conclusions.Finally,combining the current status of China’s listed companies with “the high ratio stock dividend and stock splits” and the behavior of selling shares by major shareholders to obtain their own interests and infringing on the interests of others,combined with China’s national conditions,put forward some practical suggestions,so that the interests of our small and medium investors can be obtained with effective protection,China’s capital market can develop better.The innovation of this article is mainly reflected in,first,this article adopts the case study method to study the frequent occurrence of the phenomenon of “ the high ratio stock dividend and stock splits” in recent years,and the previous research is mostly empirical research.Secondly,the previous literature on " the high ratio stock dividend and stock splits " research mainly from the perspective of dividend policy,more research is the market response after " the high ratio stock dividend and stock splits " or only study the behavior of selling shares by major shareholders,this article will be listed companies " the high ratio stock dividend and stock splits " phenomenon was studied together with the behavior of selling shares by major shareholders,revealing the link between the " the high ratio stock dividend and stock splits " dividend distribution plan of listed companies and the behavior of selling shares by major shareholders.Thirdly,this article helps to protect the rights and interests of small and medium investors in China by understanding the special purpose of the “the high ratio stock dividend and stock splits” program of listed companies.