The Analysis Of Motivation And Rationality Of Huge Cash Dividends Of Offcn Education

In recent years,China Securities Regulatory Commission continue to improve the cash dividend system in order to improve China ’s capital market dividend payment rate is low,cash dividends instability,encourage listed companies to actively carry out cash dividends.Driven by macro policies,more and more listed companies are paying cash dividends,and some listed companies that pay huge dividends have emerged.A high proportion of cash dividends will lead to a large amount of capital outflow from the company,which will have an impact on the subsequent development of the company and the interests of shareholders.Therefore,it is necessary to comprehensively analyze whether cash dividends are reasonable in combination with the company’s future development direction,financial pressure,and enterprise life cycle theory.This paper adopts the case study method.Firstly,according to the current situation of cash dividends of Offcn Education from 2018 to 2019,it is found that Offcn Education has accumulated cash dividends of CNY 28.99 billion since its asset restructuring to prepare for backdoor listing,of which 2018 and 2019 accounted for 100% of its total dividends.Therefore,this paper analyzes the phenomenon that the company’s cash dividend amount is too large and the proportion is too high.Secondly,it analyzes the internal and external motivations of the huge cash dividends of Offcn Education.The study found that the internal motivations of the huge cash dividends of Offcn Education mainly include:(1)2018-2019 has strong profitability and sufficient cash flow to be able to make cash dividends;(2)Cash dividends help to promote the smooth progress of the 2019-2020 refinancing plan;(3)Reduce agency costs between managers and shareholders.External motivations mainly include:(1)responding to the CSRC dividend policy;(2)Transfer good signal;(3)Market competition is increasingly fierce,need to rely on dividends to improve visibility.At the same time,this paper analyzes the rationality of the huge cash dividends of Offcn Education for two consecutive years from the perspective of financial effects,stakeholders and stock market.The study found that:(1)the huge cash dividends of Offcn Education will reduce the company’s solvency,profitability and growth ability,and have a negative impact on the company’s future development;(2)Due to the high concentration of shares of Offcn Education,the benefits of huge cash dividends are concentrated in large shareholders,which harms the interests of small and medium investors;(3)Based on the event study method,the analysis found that the cash dividend of Offcn Education in 2018 transmitted a positive signal in the short term,and the subsequent market reaction gradually declined,but the market responded well to the cash dividend in 2019;(4)Based on the calculation of Tobin ’s Q value,it is found that the cash dividend of Offcn Education from 2018 to 2019 has a positive impact on the enterprise value of the dividend year in the short term.In the long run,it has a negative impact on enterprise value.Finally,this paper puts forward relevant suggestions on the huge cash dividends of Offcn Education from the company level,the small and medium-sized investor level and the government level.