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Controlling Shareholders and Tendency of Cash Dividend Distribution
Author: TongHuanLe
Tutor: ChenLiTai
School: Chongqing University
Course: International Trade
Keywords: The tendency of cash dividend distribution The nature of controlling shareholders The share ratio of controlling shareholders Catering theory
CLC: F275
Type: Master's thesis
Year: 2011
Downloads: 205
Quote: 0
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Abstract
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The tendency of cash dividend distribution is focused in Chinese Security Markets. It is not only the allocation of enterprise profit and one of important financial management activities of listed company, but also the result of the game between the controlling shareholder, small shareholders, creditors and managers. So, is there any difference in the tendency of cash dividend distribution if the nature of the controlling shareholders and the shareholding of the controlling shareholders is different?Using the catering theory, the paper investigates the relationship between the characteristics of the controlling shareholder of Chinese listed companies and the tendency of cash dividend distribution. The main contents includes:①in accordance with the economic attribute, the controlling shareholders will be divided into state-owned holding and non-state-owned holding, making research in the relationship between the tendency of cash dividend distribution and the nature of the controlling shareholder;②in accordance with the share ratio, the controlling shareholders will be divided into absolute holding structure company (ABS), relative holding structure company (REL), ownership restriction structure company (RES), making research in the relationship between the tendency of cash dividend distribution and the share ratio of the controlling shareholder;③based on the earlier studies, this paper gets the final conclusion and makes some suggestions.The main conclusions are:①the tendency of cash dividend distribution is not the same, if the nature of the controlling shareholders is different. In state-owned holding companies, managers cater to investors by paying cash dividends when investors put a stock price premium on payers. In non-state-owned holding companies, managers don’t cater to investors by paying cash dividends when investors put a stock price premium on payers.②the tendency of cash dividend distribution is not the same, if the share ratio of the controlling shareholders is different. In absolute holding structure, managers cater to investors by paying cash dividends when investors put a stock price premium on payers. The cash dividend is one of the important ways for controlling shareholders obtaining "tunnel effect" still. In relative holding structure companies and ownership restriction structure companies, managers don’t cater to investors by paying cash dividends when investors put a stock price premium on payers. The conclusion plays an important role for the listed companies for perfecting the system of governance, restraining the "tunnel effect" and promoting the healthy development of listed company.
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CLC: > Economic > Economic planning and management > Enterprise economy > Corporate Financial Management
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