Research On The Market Response To The Changes Of Corporate Dividend Policy

Although China’s capital market has not been developed for a long time,it has been gradually improved.Listed companies also pay more and more attention to the distribution of dividends.Among them,Gree Electric has basically maintained a generous dividend since its listing,which is a typical high-paid cash company.In this context,on April 25,2018,Gree Electric suddenly announced that it would suspend dividends in 2017 under good conditions.This is a huge change in dividend policy,which is closely related to the development of enterprises.The domestic and foreign scholars focus on the key issues,so the market impact of this change is of research value.This article not only studies the reasons and market response to this interruption of dividends,but also explores how companies should formulate appropriate dividend policies,whether they can be easily changed,and remedial measures for market impact when dividends must be reduced.This paper first analyzes Gree’s dividend policy over the years on the basis of combing relevant literature and theory,and finds that it seems to maintain a continuous high dividend,the actual dividend payment rate is relatively unstable,and the actual return on shareholders and the After comparing the cost of capital,it was found that the return to shareholders was high or low,and it was extremely unstable.Under this premise,due to the need for technological innovation and diversified development of Gree Electric Appliances,coupled with Dong Mingzhu’s overconfidence and other factors,the results of the 2017 dividend suspension were created.Then,by studying its market response,it was found that the change caused a great negative impact both in terms of short-term and long-term market response.Then explored several reasons for its impact.In the end,it was found that Gree Electric did not take into account the interests of the majority of shareholders,did not pay attention to the stability of the dividend policy,and did not take precautionary measures against possible market reactions in advance.At this point,the approach is not good and needs to be improved.Finally,in view of these problems,suggestions are made from multiple angles.