What is the function of dividend policy?

Question 1: What is the function of dividend policy? The management of listed companies should follow certain principles when formulating dividend distribution policies, and fully consider the relevant factors affecting dividend distribution policies and market reactions, so as to standardize the company's income distribution. Research background: Dividend distribution policy is a decision-making problem for listed companies to allocate or retain profits for reinvestment, which plays a vital role in the company's operation, and is related to the company's long-term development in the future, shareholders' requirements for return on investment and the rationality of capital structure. On the one hand, a reasonable dividend distribution policy can provide a source of funds for enterprise scale expansion, on the other hand, it can establish a good image for enterprises, attract potential investors and creditors, and maximize the company value, that is, shareholders' wealth. Therefore, listed companies attach great importance to the formulation of dividend distribution policies, and usually compare different dividend distribution policies after comprehensively considering various related factors, and finally choose dividend distribution policies that meet the company's characteristics and needs. The release of dividend distribution policy will also have an important impact on the market. Because dividend distribution policy has a strong correlation with company value, it will inevitably convey some value information. The theory of "signal transmission" holds that the company's dividend distribution policy is not only a distribution scheme, but also an effective signal transmission tool. The change of dividend distribution policy is often a signal of the change of the company's operating conditions, and these signals have both positive and negative effects on the market. The more efficient the capital market, the higher the efficiency and the lower the cost. Because investors believe that management, as an insider, holds the most authentic and comprehensive information about the company's business development at present, and they will prove their business ability to investors through dividends. Because investors have different dividend preference characteristics, they will choose to accumulate around the listed companies that suit their dividend preference. Therefore, companies can attract investors by designing and modifying dividend distribution policies and including more information in dividend distribution policies. In the mature foreign capital market, the dividend policy of listed companies can generally be divided into four ways: cash dividend, stock dividend, property dividend and debt dividend, among which cash dividend is the most widely used. In China stock market, there are three common dividend distribution methods for companies: cash dividend, bonus share and capitalization of reserve fund. Considering the mixed use of the above methods, all dividend distribution policies can be divided into eight types: no distribution, cash dividends, dividends, cash dividends plus dividends, cash dividends plus dividends, dividends plus dividends, dividends plus dividends, and dividends plus dividends. On the basis of combining foreign research methods and the specific situation of China stock market, this paper hopes to test the relevant factors and market reaction of China listed companies in formulating dividend policy through the data of listed companies in 2002. Literature Review In similar research abroad, many factors have been proved to have an impact on the dividend distribution policy formulated by the management of listed companies. Julie Ann Elston examines the relationship among dividend distribution policy, liquidity constraints and investment opportunities in "Research on Influencing Factors of Dividend Distribution Policy of American Listed Companies" ―― Separate Policy and Investment: Theory and Evidence from American Panel Data. The results show that this connection is very possible in an imperfect capital market. When the company's cash situation is poor or there are many investment opportunities, it will usually consider stopping or cutting dividends. Michael and Anjan studied and developed the theory of dividend policy choice and investor preference. Although there are tax incentives for capital gains, the empirical results show that most individual investors still want to pay less cash dividends, retain potential growth opportunities in the future, or achieve greater returns through capital market repurchase. In the research, Sudipto assumes that external investors have insufficient information about the company's profitability, and the cash dividend tax burden is higher than the capital gain, and tests some related factors of dividend function. The conclusion shows that the dividend function is significantly influenced by the expected cash flow. Dividend distribution policy, as a policy for listed companies to distribute income at the end of the period, usually causes stock price fluctuations in the secondary market. There are many studies on the relationship between dividend distribution policy and stock price abroad. The MM theorem put forward by Miller and Modigliani in 196 1 holds that under the condition of complete capital market, the increase or decrease of the company's dividend causes the change of the stock price because the dividend distribution policy contains information about the future operation of the enterprise. Lintner made an empirical study on it in 1956, and the conclusion supported MM theorem. What about the certificate ... >>

Question 2: The function of stock dividend is to transfer capital reserve into share capital, that is, when the capital reserve per share is 1.00 yuan, the company's stock has the corresponding ability to transfer 10. The company can donate a share of stock with the ten-cent provident fund. The company's money did not leave the company, but the company's total share capital expanded and its net assets were seriously diluted. What is the company's surplus capital reserve? According to the Company Law, the remaining statutory reserve fund shall not be less than 25% of the registered capital before transfer (that is, according to the total capital at the time of registration, the par value of each share is 65,438+the total number of shares in 0 yuan *). That is, when the provident fund is greater than 1.25 yuan, it can be increased from 10 to 10.

Converting capital reserve into share capital is the profit distribution behavior of the company. From the analysis of the report, we can see that in the column of owners' equity, the capital in capital reserve decreases, while the capital stock increases correspondingly, with the same amount, which is equivalent to the same owners' equity. However, the money accumulated by the company was distributed to shareholders, which turned into an increase in the share capital of each shareholder.

As for the capital accumulation fund, only 65,438+0 yuan dollars will be converted into 65,438+00. Financially speaking, if the provident fund account has 65,438+0 yuan, it can be completed by increasing the share capital by 65,438+0 yuan. But legally, it is illegal, because the transferred provident fund account cannot be less than 25% of the original share capital. So it can't be simply calculated.

Formulating accounting policy is a basic content of establishing modern enterprise system, and it is also the most important link of applying accounting theory to practice. In the process of China's transition from planned economy to market economy, with the establishment and strengthening of enterprise management, this problem is particularly urgent and has been highly valued by accounting theorists and practitioners. Judging from the existing research situation in the theoretical circle, most of them are limited to the study of general theoretical issues such as the concept, nature, characteristics and objectives of accounting policies, and there is still a lack of concrete analysis of accounting policies from the perspective of practical treatment [1]. In view of this, this paper chooses the accounting event of company distributing stock dividends, and briefly analyzes the causes, formulation and economic consequences of accounting policies, in order to arouse the interest and attention of theoretical circles on this issue, and also provide some reference opinions for accounting treatment of stock dividends in practical circles.

China's Accounting Standards for Enterprises-Accounting Policies, Changes in Accounting Estimates and Correction of Accounting Errors defines accounting policies as specific principles followed by enterprises in accounting and specific accounting treatment methods adopted by enterprises. According to different subjects, accounting policies can be divided into macro-accounting policy and enterprise accounting policy. The former is mainly reflected by the formulation and implementation of accounting standards by * * * or authoritative organizations. Under the guidance and constraint of macro-accounting policy, the accounting principles, methods and procedures selected by enterprises according to their own actual conditions are often called micro-accounting policies. The main reason of accounting policy lies in the fuzziness of accounting itself and the different accounting views held by people [2].

Because the owner's equity itself is obtained through the rollback of assets and liabilities, it is the final embodiment of various accounting policies, which undoubtedly adds complexity to the accounting treatment of its own changes, and its accounting policies have corresponding particularity. However, stock dividend payment is a typical accounting event that causes internal changes in equity through capitalization of retained earnings. For a long time, people have been controversial about the accounting treatment of stock dividends. In a sense, stock dividend itself stems from people's understanding of shareholders' rights and interests. This makes the study of stock dividend accounting policy particularly typical.

(A) confirmation of carry-over subjects

The company's stock dividend can be regarded as the combination of account carry-over and stock split. Because stock dividends do not represent the increase of shareholders' investment in the company, if shareholders' rights and interests are not divided separately in accounting, or the rights and interests are divided completely according to the source, there will be no carry-over problem between accounts. However, in the current accounting practice, in order to provide information related to decision-making, accountants do not completely follow the source standard, but consider multiple objectives. The typical classification method is to divide shareholders' equity into capital account and retained earnings account. The former can be further divided into permanent capital (share capital of joint-stock companies) and capital reserve account (capital reserve of China). In this way, carry-forward entries can be carried forward from capital reserve and retained earnings to permanent capital account respectively.

(2) Measurement of carry-over amount

The accounting essence of distributing stock dividends is to increase legal capital by carrying forward retained earnings (including capital reserve under the authorized capital system) without changing the company's total assets. After carry-over, the use of assets with the same amount is restricted, and the board of directors cannot distribute these assets to shareholders as before, with a limited amount of >>.

Question 3: What is the difference and purpose between cash dividend and stock dividend? Cash dividend is the dividend paid by listed companies to shareholders in the form of currency, and it is also the most common and common form of dividend, such as the dividend per share; Stock dividend is a form of dividend distribution, which will increase the number of shares in circulation. I hope it helps you.

Question 4: What are the benefits of stock dividends to enterprises and shareholders respectively? What is the impact on shareholders' wealth? Main factors to be considered in formulating dividend policy.

When a company formulates its dividend policy, it must fully consider the various influencing factors of the dividend policy, and proceed from protecting the interests of shareholders, the company itself and creditors, so as to rationalize the income distribution of the company.

Various restrictions

First, legal and regulatory restrictions. In order to safeguard the interests of all parties concerned, laws and regulations of various countries regulate the company's profit distribution order, retained profits, capital adequacy, debt repayment and cash accumulation, and dividend policies must conform to these legal norms. The second is contractual restrictions. When a company borrows long-term debt, the debt contract usually has certain restrictions on the company's cash dividend, and the dividend policy must meet the restrictions of such contracts. The third is the limitation of cash adequacy. The company must have enough cash to pay cash dividends, which can meet the cash demand of the company's normal business activities. Otherwise, the amount of cash dividends will be limited.

Macroeconomic environment

Economic development is cyclical, and companies will also be affected by the macroeconomic environment when formulating dividend policies. For example, in the past few years, listed companies in China were represented by a large proportion of rights issue, and in recent years, cash dividends have increased year by year.

(3) Inflation

When inflation occurs, depreciation reserves often cannot meet the needs of replacing assets. In order to maintain the original production capacity, the company needs to make up for it from the retained profits, which may lead to a decline in the dividend payment level.

(d) Maturity of the market

The empirical research results show that in the mature capital market, cash dividend is the most important form of dividend, while stock dividend shows a downward trend. As China is still a new capital market, stock dividends have become an important form of dividends compared with mature markets.

(v) Investment opportunities

The company's dividend policy is largely restricted by investment opportunities. Generally speaking, if the company has many investment opportunities and a large demand for funds, it will often adopt a policy of low dividends and high retention; On the contrary, if there are few investment opportunities and small capital demand, it is possible to adopt a high dividend policy. In addition, affected by the possibility of accelerating or postponing the company's investment projects, if this possibility is greater, the dividend policy will have greater flexibility. For example, some enterprises intend to pay more dividends to affect the stock price rise, so that the issued convertible bonds can be converted into shares as soon as possible to achieve the purpose of adjusting the capital structure.

(6) solvency

A large amount of cash dividends will inevitably affect the company's solvency. When determining the amount of dividend distribution, the company must consider the influence of cash dividend distribution on the company's solvency, so as to ensure that after cash dividend distribution, the company can still maintain a strong solvency, thus maintaining the company's reputation and lending ability.

(7) liquidity.

If a company has strong liquidity of assets and sufficient cash sources, then its ability to pay cash dividends is strong. However, fast-growing and profitable enterprises are usually unwilling to pay more cash dividends if most of their funds are invested in fixed assets and permanent working capital, which will affect the company's long-term development strategy.

(VIII) Cost of capital

When determining the dividend policy, the company should fully consider the number and cost of various financing channels to make the dividend policy adapt to the company's reasonable capital structure and cost.

(9) investor structure or shareholders' attitude towards dividend distribution

Every investor's investment purpose in the company is not completely consistent with his attitude towards the company's dividend distribution. Some are permanent shareholders of the company, paying attention to the long-term stable development of the company and paying little attention to the current income. They hope that the company will pay less dividends temporarily to further enhance the company's long-term development ability. Some shareholders invest in order to get high dividends, and they are very partial to the policy of regular high dividends; Another part of investors prefer speculation. The purpose of investment is to obtain the price difference through stock trading because the stock price fluctuates greatly during the short-term shareholding period. Dividend policy must take into account the different attitudes of these three types of investors to dividends in order to balance the relationship between the company and various shareholders. If the proportion of shareholders who pay more attention to the current income is large, the company needs to pay more dividends to ease the contradiction between shareholders and management. In addition, each factor has different influence on different investors, and the company should also consider the characteristics of shareholders when determining its own dividend policy.

When a company decides its dividend policy, there are many factors to consider. Because these factors cannot be completely determined by quantitative methods, they mainly rely on qualitative judgment. ...& gt& gt

Question 5: What is the significance of stock dividends to shareholders? 1. Keep the stock price within a reasonable range. In the case of constant profits, issuing stock dividends can reduce stock prices, increase liquidity and attract more investors.

2. Send a good signal to the market at a lower cost. The distribution of stock dividends is generally based on the premise that managers are optimistic about the company's prospects, and its information advantage is manifested through stock dividends.

3. In addition, stock dividends may be related to the industry cycle. In the growth period, for the rapid development of enterprises, more internal profits are retained (the internal financing cost is lower than the external cost and the risk is smaller), and stock dividends are distributed. This is not only conducive to the growth of enterprises, but also allows shareholders to enjoy the wealth brought by stock appreciation.

Question 6: What is the significance of stock repurchase? 1. Significance to shareholders

Shareholders are required to pay capital gains tax after share repurchase and dividend tax after cash dividend. In the case that the former is lower than the latter, shareholders will get tax incentives. On the other hand, if all kinds of factors are likely to change due to stock repurchase, it is difficult to predict whether the result is beneficial to shareholders. In other words, stock repurchase has an uncertain impact on the interests of shareholders.

2. Meaning to the company

The ultimate goal of stock repurchase is to increase the value of the company:

(1) One of the purposes of the company's share repurchase is to send a signal to the market that the share price is undervalued. The effect of stock repurchase is opposite to that of stock issuance. Stock issuance is considered as a signal that the company's stock is overvalued. If the company's management thinks that the company's current share price is undervalued, it will send a positive message to the market through stock repurchase. The market reaction of stock repurchase is usually to raise the stock price, which is conducive to stabilizing the company's stock price. If the stock is still undervalued after the repurchase, the remaining shareholders can also profit from the low-price repurchase.

(2) When the company's disposable cash flow obviously exceeds the cash flow required for investment projects, it can use free cash flow for stock repurchase, which will help improve the profitability per share. Stock repurchase reduces the company's free cash flow and reduces the agency cost of management. The management tried to convince investors that the company's shares were attractive through stock repurchase, and the company did not waste shareholders' money on investments with poor returns.

(3) Avoid the negative impact of dividend fluctuation. When the company's remaining cash is temporary or unstable, and it is uncertain whether it can maintain a high dividend policy for a long time, it can pay dividends through stock repurchase on the basis of maintaining a relatively stable dividend rate.

(4) Give full play to financial leverage. If the company thinks that the proportion of equity capital in the capital structure is high, it can increase the debt ratio through stock repurchase and change the company's capital structure, which will help reduce the weighted average cost of capital. Although paying cash dividends can also reduce shareholders' equity and increase financial leverage, their earnings per share are different under the same income. In particular, by issuing bonds to buy back the company's shares, the debt ratio can be quickly increased.

(5) Through stock repurchase, the number of external tradable shares can be reduced, the stock price can be raised, and the risk of the company being acquired can be reduced to some extent.

(6) Adjust the ownership structure. The company owns the repurchased shares (treasury shares).

Question 7: Why is the positive effect of cash dividend on stock price far less than that of stock dividend in China? Hello, cash dividend refers to the dividend distributed to shareholders in cash, which is the most common way of dividend distribution. Most investors like cash dividends, because this is the profit they get, and cash dividends issued by enterprises can stimulate investors' confidence. Cash dividends focus on reflecting short-term interests and are very attractive to shareholders who value short-term interests.

Stock dividend means that the company pays dividends by issuing new shares for free, because it can not only reduce the company's cash, but also enable shareholders to share profits, and it can also be exempted from personal income tax, because the stock dividend that is more conducive to long-term investors focuses on reflecting long-term interests and is more attractive to shareholders who value the company's potential development ability and don't care much about immediate dividends.

Question 8: Significance and value of share repurchase. Share repurchase is conducive to promoting the efficient and orderly operation of the securities market. 1. Share repurchase is a powerful tool and conventional weapon for the company to implement anti-takeover strategy, which is conducive to stabilizing and maintaining the company's share price. Share repurchase is widely used in western developed countries, and it is an important tool and conventional weapon to implement anti-takeover strategy in mature capital markets. The reason is that if the shares are repurchased from external shareholders, the shareholding ratio of external shareholders will decrease, and the shareholding ratio of the original major shareholders will increase accordingly, and their control rights will naturally be strengthened; If the company's asset-liability ratio is low, after share repurchase, the asset-liability ratio can be appropriately increased, the financial leverage effect can be more effectively exerted, and the company's future profit expectation can be enhanced, thus raising the company's share price and raising the acquisition threshold; If the company has abundant cash reserves, it will easily become the target of acquisition. In this case, the company can buy back shares in cash, which can reduce the possibility of being acquired, which is a scorched-earth tactic in anti-takeover technology. A company can directly buy back its shares at a price much higher than the market price, thus pushing the stock price to soar and repelling other acquirers, thus achieving the purpose of anti-takeover. 2. Share repurchase can restrain excessive speculation, help to stabilize the ups and downs of the stock market and promote the standardized and steady operation of the securities market. According to western classical theory, share repurchase plays an active role in determining the reasonable share price of a company and restraining excessive speculation. The reason is: (1) Under normal circumstances, the stock market is prone to depression when the macro economy is depressed and the market funds are tight. If left unchecked, it may lead to heavy selling pressure on the stock market and fall into a vicious circle of falling stock prices and poor liquidity. At this time, if listed companies are allowed to buy back shares and return idle funds of listed companies to shareholders, the liquidity of the market can be enhanced to some extent, which is conducive to the formation of a reasonable stock price of the company. 1987 When the new york stock market plunged in June 10, within two weeks, 650 companies issued repurchase plans to buy shares to curb the further decline of the company's share price. (2) Listed companies know their own information best, and the repurchase price determined by them is close to the actual value of the company to a certain extent (except in the case of anti-merger), which makes the change of virtual capital price closer to the physical production process, thus inhibiting excessive speculation in the stock market. (3) In the case of excessive speculation in the market, if the stock price is too high, it may cause the stock price to remain depressed after the speculative bubble bursts. At this time, it is necessary for the company to use the previously repurchased shares to intervene and urge the stock price to return to its intrinsic value, thus helping to curb excessive speculation to some extent. It is worth noting that the use of treasury shares is a very important factor in the mechanism of restraining excessive speculation and stabilizing the violent fluctuation of the stock market through share repurchase abroad. The existence of treasury shares enables the company to flexibly control the number of tradable shares, which is conducive to the formation of a reasonable stock price. However, the current laws in China stipulate that the repurchased shares must be cancelled within 10 days, and the company is not allowed to own treasury shares. This is a major legal obstacle for listed companies in China to implement share repurchase. 3. Share repurchase is conducive to the establishment of employee stock ownership system and stock option system. In foreign companies, employee stock ownership, especially management stock ownership, is a very common phenomenon. When the treasury stock system exists, the company can buy back its own shares from shareholders, which will be managed by the employee stock ownership association or directly used as a stock option to reward the company manager, which is conducive to establishing an effective incentive and restraint mechanism and enhancing the cohesion and centripetal force within the company. As far as the feasibility of implementing employee stock ownership or management stock ownership system in listed companies in China is concerned, one of the biggest obstacles at present is the lack of legal stock sources that can be used for this system arrangement. One of the important functions of share repurchase in foreign companies is to buy back some shares for the employees or management of the company. At present, China's laws do not allow the existence of treasury shares, so it is difficult to establish employee stock ownership system and stock option system. Share repurchase is conducive to the formation of a win-win situation for listed companies and shareholders. For listed companies: (1) Share repurchase can adjust and improve the company's shareholding structure and lay a good foundation for the company's long-term development. (2) Through share repurchase, the capital structure can be optimized, the asset-liability ratio can be appropriately increased, and the financial leverage effect can be more effectively exerted. Maximizing shareholders' wealth is the financial management goal of listed companies, and the realization of this goal depends largely on the optimization of their capital structure. Share repurchase is an important way to improve the value of the company by optimizing the capital structure, so as to maximize the wealth of shareholders. Of course, foreign practice shows that & gt

Question 9: Why does the parent company adopt the cost method for the long-term equity investment of its subsidiaries? The Accounting Standards for Business Enterprises issued by the Ministry of Finance stipulates that the parent company adopts the cost method for its subsidiaries. The textbook will not explain why the cost method is used.

Regarding the first point: the parent company decides to pay dividends according to its own operating conditions. When the cost method is used for accounting, the investment income of the parent company is confirmed according to the dividends actually paid by the subsidiaries. For example, the parent company lost 6,543,800 yuan this year and held 90% of the shares of its subsidiaries. In order to turn the total profit of the statement into profit, subsidiaries can be allowed to distribute dividends exceeding 654.38+065.438+00000, which are included in the investment income of the parent company as distribution.

Second, the equity method is based on the income of subsidiaries to confirm investment income. The book value of the parent company's long-term equity investment is the proportion of the subsidiary's equity, and the book value changes with the change of the subsidiary's equity. Accounting by the cost method, the book value of the long-term equity investment of the parent company is the fair value at the time of investment, which does not change with the subsidiary changes in equity and does not play a verification role.