Foshan Lighting (Foshan Electric Lighting Co., Ltd., code 000541) is a t-market company listed on the Shenzhen Stock Exchange in November 1993. As of 2001, a total of more than 1.2 billion yuan was raised from the stock market (including more than 600 million additional funds raised at the end of 2000), and accumulated dividends of more than 800 million yuan over the years. If the investor does not count the shares held in the secondary market, only one dividend will be paid, and the investment cost will be exceeded. Such a high proportion of dividends (see Table 1) is rare among more than one listed company. Obviously, Foshan Lighting is quite different from China's many non-distributed companies, especially those that are not distributed. Moreover, Foshan Lighting's asset-liability ratio has been relatively low (for example, the company's asset-liability ratio in 2001 was only 9.28%), 2001). So how to look at Foshan Lighting's corporate financial policy? The author tries to understand Foshan Lighting's dividend policy and financing policy from Western financial theory and empirical research.
Cash dividends of listed companies are distributed at a cash dividend of 0.80.700.40.40.40.30.4. Average of listed companies - Source: Calculated according to relevant data of the websites of Shanghai and Shenzhen Stock Exchanges. Note: In addition. Foshan Lighting also transferred 5 shares and 1 share for every 10 shares in 丨996 and 1999 respectively. The average cash dividend per share data of the company was not found in 200 years.
Since the manager's compensation (income) is related to the company's regulatory investment: (Muller, 1969), it can increase its remuneration; 3 public d can provide more positions after the expansion of the scale to make the genus The senior management of listed companies said that their income can be divided into monetary income and control income (non-monetary income). As for monetary income, the amount of f is small, and there is not much correlation with the company's performance. The correlation coefficient is only 0.0000056, and the correlation coefficient between the number of shares held by the company and the company's current year's operating performance is only 0.000161 (Wei Gang, 2000) u can say that my country. The city company not only has the phenomenon that the equity incentive is not obvious, but Ft also has the phenomenon that the annual salary is not obvious. Therefore, the managers of the public Hi are more motivated to encroach on the resources of the shareholders and creditors, and the more the better, that is, Jensen 19M) The “free cash flow†(FiveCashFlow) is said to meet the needs of maximizing its benefits. However, Ifri believes that the liability is a hard budget constraint and has a hard-working management team to work hard. There will also be incentives to accumulate capital resources within the company for independent external intervention. Therefore, China's listed axioms are less willing to reduce their own controllable resources, reducing the effectiveness of control from Ifll.
However, in Foshan Lighting's shareholder structure, boring stocks accounted for 24%, domestic legal person shares (founder legal person shares and legal person shares) accounted for 12%, circulation A shares 41%, circulation B 1 Foshan Lighting's dividend policy is the company's shareholders will The best embodiment is reflected in the principal-agent relationship between the shareholders and managers of Foshan Lighting. The shareholders of the company are maximizing the wealth of the shareholders in pursuit of their own interests. Similarly, the manager is also pursuing the maximization of their own interests. When shareholders invest in a company, what shareholders are pursuing is to continue to earn more than their capital costs. Therefore, when the company can bring shareholders more than the cost of capital (opportunity cost), shareholders are willing to leave the money to the company's operations, otherwise shareholders would rather withdraw funds for other investments to maximize wealth. When the cash flow remaining after the difference between the net operating profit of the adjustment tax and the net investment is retained in the company, this part of the cash is called Freecashflow. Obviously, the yield of this part of the cash flow is lower than the average rate of return of the society, so the shareholders hope that the company will repay the shareholders with other means such as dividend distribution. However, due to the unique nature of the company limited by shares, when the shareholders invest the funds in the company, this part of the funds is out of the control of the shareholders, and directly becomes the financial resources occupied and dominated by the insiders of the company. According to Jensen Meckling (1976) theory, there is a potential conflict of interest between shareholders (clients) and managers (agents), the company manager may deviate from the interests of shareholders, and he believes that managers always have Motivation makes the company exceed its optimal scale, the reasons are: (P can increase its controllable economic resources; 2168 scientific and technological progress and countermeasures * March issue * shares 23%, the largest shareholding ratio of 23.97%, the top five shareholders' equity The concentration is 27.3%, and the top ten shareholders' equity concentration is 29.01%. This decentralized and non-absolute ownership structure is beneficial to the company's control market to take over the external monitoring mechanism, which is beneficial to the improvement of the corporate governance structure of the boiling mountain lighting. In addition, in the company's dividend distribution, H-share shareholders (including some A-share shareholders) are accustomed to dividend distribution. Therefore, under the shareholder structure of Foshan Lighting, this willingness may rise to the will of the shareholders' meeting. It is also the best embodiment of the will of shareholders. Of course, Foshan Lighting’s choice of financial policy is not necessarily the best choice for insiders, but shareholders.
2 The capital structure of Foshan Lighting is an inevitable choice under the current corporate financial management environment. Western financial theory believes that maximizing shareholder wealth is the operational goal of listed companies' capital structure, while financing decision-making and capital structure management are to achieve sustainable development and shareholder wealth. An important part of maximization, and the company usually changes its financing structure from the perspective of value-added and sustainable development for shareholders according to its own development stage and investment strategy, and dynamically adjusts the capital structure. The core of capital structure theory is what kind of capital structure (that is, the ratio between debt capital and equity capital) is conducive to the improvement of corporate value.
1984) et al. further proposed on the basis of MM theory research: due to the tax exemption policy of interest, the company can increase its market value by increasing debt. However, as the debt ratio increases, the probability of a company's financial deficit is also increasing, and even leading to bankruptcy. However, regardless of bankruptcy or not, the increase in the company's financial deficit probability brings additional costs to the company. The company's value is reduced. Therefore, the company's optimal capital structure is the result of tax-free preferential income and various cost trade-offs caused by rising probability of financial deficits. This theory is called Tradeoff Theory.
From the overall annual report of the company and listed companies in 1999 (see Table 2), the company's asset-liability ratio is about a far cry from the company's average asset-liability ratio. Moreover, the company's current operating efficiency is very good. It is reasonable to say that it should be sufficient. Leverage debt and leverage its financial leverage to boost the company's earnings per share: On the other hand, the “foraging†order is in profitable investment projects, and its financing should first pass the internal table for 2 years to report J999' 10: Annual Report 2000 Annual Report 2001 Annual Report Foshan Lighting Asset and Liability Rate 18.5% 14.71% 9.28% Listed company's asset-liability ratio 52.46% 53.78% 50.9% Table 3 Annual Report 1999 Annual Report 2000 Annual Report 2001 Annual Report Stock Asset (yuan) 4.35 .245.32 Return on net assets 13.37% 8.59% 9.09% Net asset growth rate 5.1% 21.86% 1.52% net asset income growth rate 1.98%-35.75% 5.82% of the funds (retained earnings and depreciation funds), then pass the low risk The bonds were finally adopted from the company's development trend in the past three years (see Table 3). The company's growth momentum is good, and it is in the process of high-speed growth, and it is urgent to need large S funds for its sustainable development. However, the company has a large amount of dividends, which reduces the company's controllable resources, reduces the company's investment, and thus affects the company's core competitiveness, and ultimately causes the company's return on net assets to gradually decline. Obviously, this is contrary to basic financial management. Maximize the value of the company. Moreover, China's commercial banks are in a period of high distressed debt risk, and the company's loans are very cautious, and there is a phenomenon of “Creditm-tiuning†(Sdglitzweiss, 丨 981); in addition, the capital market is extremely underdeveloped, and the company is not used to it. Financing tools are selected according to their own needs, and they are not skilled in the use of various financing tools. Therefore, the company can only reduce the company's return on net assets by reducing investment, maintaining the company's stable dividend policy. 3 3 Foshan Lighting's capital structure and dividend policy is the company's sub-optimal choice from the company's current capital structure, although Now that the business performance is good and the development momentum is good, but its asset-liability ratio (about 10%) is the company's best capital structure, it is difficult to guess whether it fully exerts the financial leverage of the debt. However, from its 2001 dividend policy and annual report, the company's return on net assets is as high as 9.09%, which is definitely higher than the opportunity cost of equity capital. If the company now announces the dividend distribution, it is obviously not conducive to the long-term development of the company and the realization of the corporate value of the company's financial goals. It is generally believed that in a relatively mature securities market, if a company has an investment opportunity that can add value to shareholders, the company will not pay dividends, but will retain it in the company to meet the needs of investment, so that the company's operating performance will continue Ascension, its stock market capitalization and investors' capital gains continue to rise, showing a high growth rate, high value-added, low debt ratio, low dividend payout ratio; meanwhile, Cornel Shapiro 1987) argues that the capital structure decision is attributed to the portion of the company's value that derives from the net present value of the future implied claims that the company wishes to sell, namely netorganizationalcapi-Ul. The higher the net organizational capital, the more the company wants to hold wealthy cash and negotiable securities, and it also hopes to issue shares in the current period and keep the funds in cash to prevent the company from falling into a financial crisis and reduce its investment in net organizational capital. On the other hand, from the analysis of the company's shareholding structure, the Foshan State-owned Assets Office only has a relatively majority controlling stake, and its second largest shareholder, Guangzhou Youchang Lighting Equipment Trading Co., Ltd., only owns 1.95% of the company's equity. Circulating B shares accustomed to cash dividends account for 23% and have a strong say in the market. Secondly, in the theory of the hand bird (Gordon, 1961), the uncertainty of capital gains from reinvestment of retained earnings is higher than that of dividends, but those who do not pay more dividends prefer to get the company. Shareholders are not practical, so shareholders naturally prefer to take back their investments through cash dividends. However, this approach may damage the interests of major shareholders (especially state-owned shareholders) on the one hand, and may also harm the potential interests of shareholders themselves. The root cause of shareholders and the company's choice of not achieving "win-win" is that China's securities market system is not standardized, and market functions (especially resource allocation functions) are not perfect.
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