Study on Institutional Investors’ Shareholding, Free Cash Flow and Dividend of Listed Corporations

Abstract

Dividend is an important manifestation of investors’ return on investment. The company dividends reflect the company’s profitability and operating conditionsLiang, Yong in a certain degree, and it also reflects the company’s social responsibility. In recent years, the governmentGan, Shengdao has continued to strengthen the supervision of dividend policy of listed Corporations, and dividend situation has gradually improved. However, mandatory dividend policy still has its own shortcomings. Through the analysis on the institutional investors’ shareholdings, the free cash flow and the dividends of the A-Shares listed Corporations of the Shanghai Stock Exchange and Shenzhen Stock Exchange, it show that there is a positive correlation between the shareholdings of institutional investors and the dividends of listed corporations, we may find free cash flow is the basis for the dividends. Soit is important to play the institutional investors positive role in corporate governance, and supervise the listed Corporations to effective use of free cash flow under the ownership structure, and actively implement the dividend policy, and the effective protection of shareholders’ interests.