Study On The Causes And Economic Consequences Of The Abnormal High Cash Dividends Of Mobi Garden

The financial decision-making body of an enterprise is composed of three parts: dividend distribution,financing and investment activities.Dividend distribution is one of the main ways of investment income of listed companies.In our country,it consists of distributing cash dividend and stock dividend two ways.Among them,the distribution of cash dividends has been the attention of various departments and investors.Before 2000,many listed companies in China lacked the awareness of cash dividends and the ability of cash distribution,and distributed dividends to shareholders in the way of transferring shares.However,since 2001,China Securities Regulatory Commission has continuously issued and adjusted policies related to dividend distribution,which have improved the situation of cash dividend distribution to a certain extent.In addition,through the continuous improvement of relevant government policies and regulations,more large enterprises began to consider paying cash dividends.A series of policies formulated and improved by the CSRC have increased the enthusiasm of listed companies to pay cash dividends,and the number of companies paying dividends has been increasing,with the amount and proportion of cash paid out gradually rising,but at the same time new problems have arisen,with some listed companies adopting abnormally high cash payouts,to which some scholars at home and abroad have paid some attention.Abnormally high payout behaviour refers to a company’s insistence on paying out higher amounts of cash dividends,regardless of its profitability and cash holding levels.This can lead to a massive cash outflow from the company,resulting in a shortage of funds for the company’s subsequent operations,which inevitably affects the company’s sustainability and growth,and greatly reduces investors’ enthusiasm for investment,jeopardising the healthy operation of the securities market.In view of this,this paper takes Mobi Garden Outdoor Products Co.,LTD.(hereinafter referred to as Mobi Garden),which has abnormally high distribution in China’s outdoor industry,as the research object and conducts a case study.Firstly,the relevant literatures at home and abroad on dividend policy and abnormally high dividend payout are sorted out and summarized,so as to determine the objective standards of abnormally high dividend payout and lay the foundation for case study.Secondly,based on the theories related to dividend policy,this paper summarizes the causes of unusually high dividend payout of listed enterprises in China,and studies the reasons for Mu Gaodi’s adoption of unusually high dividend policy,and concludes that its existence is the motivation to meet the interests of controlling shareholders and signal transmission.In the short term,the profitability of the enterprise will decline,the growth ability will be weakened,the debt repayment pressure will increase,and finally the value of the enterprise will have certain negative economic consequences.Finally,the paper puts forward countermeasures and suggestions from the perspectives of the company itself,investors and external regulators,hoping to establish a positive image of the company,improve investors’ confidence,clarify the direction of regulatory responsibility,and promote the highquality development of China’s capital market.