Nowadays, since the most of individual investors provide money to company for real cash inflows, paying cash dividend, as the main way to pay money back to the investors, is definitely paid more attention to. But for the company, keeping money in itself can help to grab development opportunities in time. This essay reveals the possible outcomes in dividend policy because of the ultimate controller’s changing. Given to the results of existing research works and the data from Chinese listed companies, after exemplifying some typical cases, the conclusion can be illustrated clearly: The ultimate controller’s changing effect cash dividend payment by generating disputes of share transfer, complicating the pyramid-shaped shareholding structure, and damaging corporate governance and operating ability. Further more, auditing and cash dividend payment are substitutes for each other as corporate economic supervision tools. Meanwhile, auditing can reduce the negative influence of ultimate controller’s changing so that investors can get more cash dividend. This paper offers a new perspective for studies about the factors of cash dividend tendency and briefly discusses how the heated topic of auditing exerts influence on the relationship.
Counterbalance mechanism of blockholders and tunneling of cash dividend: Evidences from Chinese listed companies from 1999 to 2003
