Research On The Motivation And Economic Consequences Of Wanhua Chemical’s High Dividend Policy

As one of the company’s core ways of distributing dividends,cash dividends have always been an important focus of management when formulating dividend policies.Since the China Securities Regulatory Commission issued a document requiring the company to explain its non-dividend payment behavior,relevant provisions and regulations to promote dividends have been promulgated one after another,which has played a key role in the healthy development of my country’s capital market.In recent years,the phenomenon of high payouts in our country has become more common,but dividends have been chaotic frequently.With the low level of cash distribution in the manufacturing chemical sector,Wanhua Chemical’s continued high cash distribution is thought-provoking.This article uses three research methods,combined with traditional dividend policy theory,to comprehensively analyze the motivation and economic consequences of Wanhua Chemical’s high cash dividend policy.This article first systematically combs the traditional dividend policy theory,cash dividend policy motivations and relevant literature on the economic consequences of cash dividend policy and expounds the connotation of traditional dividend policy;secondly,it analyzes the current situation of Wanhua Chemical’s high cash dividend policy implementation and discusses Its dividend distribution characteristics and profitability level;again,from the perspectives of dividend catering theory,agency cost theory and overall listing,an in-depth study of Wanhua Chemical’s 19-year high-paying current motivation;finally,the high-paying of Wanhua Chemical The economic consequences of the current dividend policy are analyzed in depth from the market response and corporate value.Through the above research,this article draws the following conclusions: First,good profitability is the internal financial support for high cash dividends;second,the cater to major shareholders,actual controllers and institutional investors has prompted the high cash dividend policy Third,employee shareholding plays a huge role in Wanhua Chemical’s implementation of the high cash dividend policy;fourth,Wanhua Chemical’s implementation of the high cash dividend policy produces short-term excess returns and has not been effectively improved in the long run corporation value.The paper has 24 pictures,18 tables,and 89 references.