Why should listed companies pay dividends? Understand the reasons for dividends-investment analysis-stock market stocks

In the financial market, if listed companies are profitable, they will generally pay dividends to shareholders, so dividends are common, but many readers don't understand why listed companies should pay dividends. There are several ways to pay dividends. Let's look at the following analysis. Listed companies want to pay dividends at the end of the year in order to better enhance the self-confidence of investors. Usually, they pay dividends at the end of the year. But in many ways, the company's dividend at the end of the year is not necessarily good news. Because ex-dividend and ex-dividend must be carried out after the end of the year, the share price will decrease after the end of the year. So investors should pay attention.

Dividends of listed companies

Why should listed companies pay dividends?

Through mastering, the key factor for the company's profits to shareholders is that the company has made money, so part of the profits are distributed to the company's shareholders. The distribution of profits by listed companies to shareholders can enhance investors' confidence in a project and attract more and more investors.

There are several ways for listed companies to pay dividends.

Dividends of listed companies. In overseas developed financial markets, dividends of listed companies can be divided into four ways.

Cash dividend form

That is, when a listed company pays dividends, it distributes cash to shareholders. This year-end dividend method can make shareholders get immediate capital profits, and the method is simple, which is the key way to pay dividends at the end of the year. However, when clearly allocating the cash ratio, there are usually differences between enterprises and company shareholders. Excessive cash distribution is warmly welcomed by the company's shareholders, but the assets used for reproduction will be reduced, which is not conducive to the company's long-term development trend; However, too little cash distribution, although the assets reproduced by the enterprise have improved, has harmed the personal interests of the company's shareholders, thus damaging the price of listed companies.

Stock dividend form

That is, listed companies use their own stocks instead of cash as a way to distribute dividends to shareholders. This year-end dividend is the way to send stock dividends. Stock dividends are generated by converting income into assets or surplus reserves into assets, which belongs to the stock issuance of Wuwei Company. Because the shares sent are distributed according to the proportion of the shares held by the shareholders of the company, the interests of each company shareholder in the enterprise will not change.

At the same time, this year-end dividend method only converts part of the retained earnings in the enterprise account into total share capital, and the property and debts of the enterprise are not damaged. The advantage of stock dividend distribution is that cash dividend distribution can stay in the enterprise to avoid being discharged from the enterprise, which not only strengthens the assets of the enterprise, but also expands the theme activities of enterprise production and operation. The shares distributed by the theme activities of shareholders of the company do not need to be paid in cash. In some capitalist countries, stock dividends can be obtained without paying corporate income tax.

Form of property dividend

In other words, an enterprise replaces cash with its own assets as a way to distribute dividends to shareholders. Dividend distribution is mainly based on the commercial paper of other enterprises owned by enterprises. Sometimes, you can use the goods of your own enterprise as dividends to distribute profits to shareholders, which not only expands the commodity sales market but also saves cash.

Debt dividend form

That is, enterprises use bonds or notes payable instead of cash as a way to distribute dividends to shareholders. According to this year-end dividend method, although the shareholders of the company do not get cash profits, they can get loan interest according to the debts owed by the shareholders of the company to the enterprise, and can also achieve the project investment purpose of the shareholders of the company.

Among the above four year-end dividend methods, cash dividend method is the most extensive one in western Europe. At present, cash dividend distribution and stock dividend distribution are the main ways of listed companies in China. There are some problems in the way of stock dividends in daily life. The most important question is what stock dividends should contain. There were two wrong behaviors on this issue before.

Tips: Dividends of listed companies are a common situation for the sustainable development of enterprises. The implementation of dividends means that listed companies have made profits in that year, and the more profits, the higher the dividends.