Modern economic development is inseparable from the stock market's healthy development, which is the world's developed countries and regions all common experience. Since December 19, 1990 the establishment of the Shanghai Stock Exchange, China's securities market after just 10 years of development, has made tremendous achievements in the national economy plays a decisive role. From the local pilot into a national big market, listed companies from dozens of growth beginning in 2004, 1388, China's securities markets to raise funds for construction, spread financial risk, optimize resource allocation and so on, played an important effect. But we also see that, with foreign securities markets mature compared to China's securities markets are still many problems, and these problems are not timely and properly addressed, will seriously affect the healthy development of China's securities market. Among them, the listed company's dividend policy is a cause of concern.
Dividend policy is the modern corporate finance activities, one of the three core, the company's financial activities occupy an important position. On the one hand, it is the company's financing and investment activities, the logical extension is the inevitable result of their financial behavior, on the other hand, the appropriate dividend distribution policy, not only to establish a good image, but also large investors in the company has continued to inspire investment enthusiasm, so the company long-term, stable development conditions and opportunities. With the development of capital markets, dividend policy has become theorists and practitioners focus. With the establishment of various theories, people have a deep understanding of dividend policy. However, from Domestic to foreign countries, despite the large literature exists, but the dividend policy has not been concluded, both in western countries or in China, the "Dividend Puzzle" still exists.
From the early nineties of last century, China's securities market in just 10 years, booming stock market finished the equivalent of one hundred years of Western history. In great success, we should clearly see that compared with mature stock market, we are still exploring the initial stage; there is still a huge gap. At present, the dividend policy of listed companies for a more chaotic. The one hand,
many companies distribute high dividends, or even super-capacity camp is. On the other hand, some very low rate of dividend. Despite the company's current profits are high, and sufficient cash flow, companies choose not to cash or cash dividends paid very little. Meanwhile, the listed company's dividend policy is the lack of continuity. Thus the current stock market there are various problems:
1, China's listed companies the right to ignore the phenomenon of investors to compare income distribution in general. Dividend distribution policy of listed companies should be an important part of financial management, dividend distribution plan should be carefully formulated. In the development of distribution programs, in addition to relevant laws and regulations to be followed, combined with the company's current situation and future development needs, the most fundamental thing is to take into account the small investors, especially the interests of investors, because they are the property of listed companies owners enjoy the right to income distribution. However, in reality, small and medium investors in income distribution rights are often neglected. Throughout the history of China's securities market since the market opened, you can see in the dividend distribution of listed companies there is often "no distribution" phenomenon, but also a rising trend year by year, a large number of take stock dividend distribution or the placement of shares as a dividend distribution so that it becomes a means of misappropriating.
2, volatile dividend distribution policy, the lack of continuity. Throughout the international securities market, almost all of the companies tend to take a stable dividend payment policy. Dividend payout rate from the impact of fluctuations in corporate profits, even if the company faces a loss, the company management has remained stable dividend payout ratio until they are sure not to reverse the loss. On the other hand, corporate managers only when convinced that increasing the profits to support a higher level of dividend payment, dividend payout ratio will improve, and they will gradually increase the dividend, the dividend until a new balance to achieve. Other hand, listed companies in China, the absence of a stable dividend policy, dividend distribution arbitrary large, which enable investors to the company dividend policy, the expected trend of stock price movement very difficult. In particular, the majority of Chinese listed companies did not follow the law of the life cycle of business development on the dividend distribution of long-term
planning, but next year the temporary decision-making, lack of strategic policy to encourage policy guidance. Therefore, both listed companies in China or the allocation of dividend payout ratios are frequently changing, the lack of continuity, not the formation of relatively stable incentives.
3, dividend distribution is extremely non-standard behavior. Dividend distribution is extremely non-standard behavior of concrete as follows: First, some of the company's board of directors of the dividend distribution plan of the development of a lack of seriousness, often arbitrarily change the distribution scheme, resulting in the secondary market; second is the "equal dividend rights" "the same stock different interests, "the phenomenon occur. In summary, the urgent need to encourage companies to scientific, systematic and theoretical research to use the guidance in order to constantly overcome the current policy development to encourage management is heavily dependent on the company's experience in sexual abuse.
Moderate Dividend policy can be summarized as: to meet the investment needs of corporate profits to achieve the lowest cost of financing, ownership structure and stability, and thus greatly increase the value of a company's dividend policy operability. In particular, an appropriate dividend policy of listed companies should have the following characteristics: moderate dividend policy is to achieve substantial increase in company value. Meet the investment needs of corporate profits, lower financing costs, to achieve stability in ownership structure are to serve that goal. In view of the facts of immature capital market, the company's performance in the form of stock value, the intrinsic value of stocks fluctuate frequently, simply "market value maximization" as the appropriate dividend policy target operation has certain unreasonable. Meanwhile Moderate Dividend Policy of Listed Companies to the controlling shareholder to profit-maximizing behavior and goals.
Dong Wei SU；“Corporate finance and state enterprise reform in China”
《China Economic Review》Vol.16；No.2；Mar 2005。
Dividend distribution of listed companies in China factors
1, limit laws and regulations.
China's laws and regulations of the company's dividend policy has the following three conditions:
First, the "Company Law" requirements. "Company Law" Article 130 provides that the issuance of shares to be shares with the same rights, with the shares with Lee. The provisions of section 177 of the order of the dividend distribution, that is, when the distribution of after-tax profit of the company should first extract the statutory fund, statutory public welfare fund (statutory provident fund and statutory extract before the first use of the Community Chest of the year to make up for loss of profits), and then only by shareholders holding Some pro-rata allocation of shares. Co., Ltd. article 179 of the statutory fund shareholders' general meeting resolution to capital, retained by the fund shall not be less than 25 percent of the registered capital.
Second, the "Personal Income Tax Act". In accordance with the "Personal Income Tax Law" and the State Administration of Taxation, "on a number of issues of personal income tax levy," which individuals have access to the equity dividend, dividends and stock dividends to 20% of the income tax levy.
Third, the "norms of listed companies on notice a number of issues" requirement.
(1) a listed company must conduct an interim dividend does pay a dividend, the distribution must be in the interim financial report has been qualified to engage in securities business, drawn up after the accounting firm audit; announced the allocation of medium-term programs may not be before the date of the interim report of listed companies publication date; the medium-term shareholders' general meeting approved the allocation of the program, the Company's Board of Directors held a general meeting of shareholders should be completed within two months of the dividend (or shares) of the distribution of matter.
(2) the development of equitable distribution of the program may not be distributed to shareholders as part of cash dividends, and other shareholders to distribute stock dividends;
(3) placement of shares of listed companies to develop programs to develop bonus programs at the same time, a placement of shares as a dividend shall not be a prerequisite.
(4) of listed companies will be profit bonus program must give Bonus shares and a clear distinction between provident fund to equity and the shareholders of the General Assembly resolution, respectively, the disclosure of sub-items may not be expressed as give Bonus shares both.
2, the national macro-economic environment.
The development of a country's economy has a cyclical character. When a country's economy at different development cycle, the country's corporate dividend policies have different effects. Correspondingly, China's listed companies in the formulation of dividend policy by the same macro-economic environment. At present, the performance of the grounds in the form of a few years ago to send a large proportion of the allotment, cash dividends in recent years has increased year by year.
When inflation, the depreciation reserve funds are often unable to meet the needs of asset replacement. Companies in order to maintain its original capacity, need to be filled in retained earnings, when management may adjust its dividend policy, leading to reduction in the level of dividend payments.
4, the financing environment for enterprises. When there is an objective of the financing for a more flexible environment, corporate debt financing can be paid the dividend and rights of the financing of the dividend, which is the company through new debt or new shares to finance the dividend. In general, larger enterprises, the more abundant strength, its ability to finance the capital market will be strong, and greater financial flexibility, of course, their ability to pay dividends stronger. For many smaller companies or new companies formed, it is difficult to take the financing of the dividend policy.
5, the maturity of the market.
Maturity of the market, usually can be divided into three forms: weak-form efficient market, semi-strong efficient markets and effective market strong. Market more effective, the higher its maturity. Empirical studies have shown that in more mature capital market (semi-strong efficient market), the cash dividend is the most important form of a dividend, stock dividends decreased. Department of China is still emerging from the capital markets, and mature markets, in China, the stock dividend is still an important form of dividends.
6, where the industry enterprises.
Dividend policy has obvious characteristics of the industry. In general, a mature industry, the rate of dividend payout is higher than in emerging industries, public utility companies to pay dividends is higher than companies in other industries. Empirical evidence shows that the industry average dividend payout rate of investment opportunities in the industry was a negative correlation between.
7, the mobility of corporate assets.
The so-called liquid assets means assets into cash difficulties. Corporate cash flow and assets, the better the overall liquidity, its ability to pay cash dividends on strong. And growing, profitable enterprises better, as most of the money invested in fixed assets and working capital on a permanent, they are usually not willing to pay cash dividends and jeopardize the enterprise security.
8, the life cycle of enterprises.
Usually the business life cycle is divided into the growth stage, development stage and mature stage. At various stages, corporate dividend policy will be subject to different effects. In the growth stage, enterprises need capital investment, in general, relatively low rate of dividend payment; in the development stage, the company began to pay a larger percentage of the dividend proceeds to the shareholders; to a mature stage, due to the relative input-output stable, dividend payout rates and stock returns will be almost unchanged.
9, business investment opportunities.
Dividend policy to a large extent influenced by the investment opportunities. If the company more profitable investment opportunities, often using low-dividend, high profit retention policies; the contrary, if the investment is less likely to adopt high-dividend policy. Of course, in the use of low-dividend policy, the company's management must be fully disclosed to shareholders in order to retain profits to invest in high-profit projects, in order to obtain the trust and support of shareholders.
Jensen；M “ Agency cost of Free Cash Flow；Corporate finance and Take
over“《American Economic Review》1986.5
Specification Dividend Policy of Listed Companies proposal
1. Dividend distribution programs in enterprise development and information dissemination
The current dividend policy of listed companies in China to develop further with a degree of arbitrariness, there have been blind to meet market needs or placement of shares issued for the purpose of misappropriating the various programs such as the previously described anomaly, not only damaged the majority of secondary market, the interests of investors, but also hindered the healthy development of China's securities market. Therefore, the securities regulatory departments should actively seek to regulate listed companies dividend policy behavior, while listed companies in the information release, including the bulletin content, format, timeliness and veracity, and requires the listed company within a specified period of time to fulfill payment of dividends issued obligations.
2， to adjust and improve the accounting treatment of dividend
The face value of our stock dividend accounting method caused two problems: first, in terms of access to the stock dividend to shareholders to obtain bonus shares equivalent to less than the price per share of net assets acquired shares, causing the company to receive bonus shares of wealth shareholders of the transfer, which shareholders receive bonus shares is very beneficial to; Second, in the case of Profits, An denominations Jinxing Songgutigao the Gongsi Kegongsonggu of shares Shu, Yinerwoguo listed companies often issued only Ke Yi Song Gu distribution program.
In some cases the profit, at face value for Song Gu, increased the number of shares the company can Songgu so listed companies in China can often put the distribution of high-Song Gu program. Which the securities regulatory authorities can make rules to increase by transferring shares of the company bonus issue and must be accounted for by market value method. This will send the number of shares and increase by transferring the red would be significantly reduced the number of shares of listed companies would no longer relying on Song goo and increase by transferring a big fuss, and then to prevent epidemic in China increase by transferring the stock market Song goo status.
3. to develop the capital market, balance of financing costs of different financing instruments
At present, China capital market and capital market is not perfect, financing a
single channel, various means of financing the cost of financing imbalances, listing the equity financing costs much lower than bank loans, issue bonds and other debt financing costs, general preference of listed companies no dividends retained earnings policy. One way to change this situation is to build strong capital markets and capital markets, expand our business financing, and to the costs of various financing instruments tend to balance, so that companies do not rely only on the stock market to sustain the operation or development of misappropriating needs, and then change the listed companies do not blindly launched distribution Song Goo, and many others actually increase by transferring and Placing proceeds will be transferred to investors with a dividend distribution of his status.
4.The reform of the securities income tax treatment
the current system has not levy capital gains tax, so in some way contributed to the speculation market behavior and speculative characteristics. In Western countries, made on the transfer of securities capital gains income tax is a common practice. Theory from the income tax, there is the taxable income. Therefore, the introduction of capital gains tax can be to some extent against speculation. However, the introduction of a capital income tax may result in significant volume shrinkage and crack down on investor enthusiasm. Which can refer to some countries in the world, including securities, including capital gains made by specific collection requirements? In addition, to adjust the state shares and corporate shares tax policy, on the state shares and legal person shares of dividend, bonus pay tax for the state shares into the market and ultimately the unification of China's stock market to create a prerequisite for fair competition.
Jensen；M. C. and Meckling ；W .H “Theory of the Firm :Managerial
Behavior；Agency Cost；and Capital Structure《Journal of Finance Economics》。