Stock Dividend Puzzles in China.ppt

Conclusions Dividing the whole sample period into two parts (from 1990 to 1999 and from 2000 to 2008), the percentage of firms paying stock dividends is shown to be much less in the second half, but with much larger payout ratios, while the percentage of companies paying cash dividends is much higher in the second half, but with lower payout ratios. The stock dividends in China have other use to control shareholders . The state-owned shareholders much more prefer cash dividends to maximize their returns. The listed companies use stock dividends to substitute cash dividends. Listed companies like to use stock dividends to attract investors . Stock Dividend Puzzles in China Hamish D. Anderson* Massey University Jing Chi Massey University Chayot Ing-aram Massey University Lu Liang Massey University 報告人: 佘濰任,黎氏翠恆 Abstract To examine the stock dividend puzzle in China during 1992-2008 by analyzing the market reaction, who pays more or solely stock dividends compared to cash dividends and the reason. Stock dividends send a positive market signal. In China, state-owned shareholders prefer cash dividends, while legal-person shareholders prefer stock dividends. Introduction Stock dividends are especially popular in the Chinese stock market. This paper objections are: - What is the scope of the stock dividend payments by the Chinese listed companies? - Why are so many companies engaged in such financial activities? - What kinds of companies are likely to pay more or solely stock dividends? - What are the market reactions to the stock dividend announcements? - The stock dividend payment behaviour and the relationship between the stock dividends and cash dividends. Literature Review The Signaling Hypothesis The Cash Substitution Hypothesis The Trading Range Hypothesis Ownership Structure and Stock Dividends The Signaling Hypothesis The private information about a company’s future perspectives needs to be conveyed to the mark