Stock Dividend Is the Natural Choice of Strong Companies: Based on Least Significant Difference Method

Abstract

Based on related dividend theories, this paper uses the empirical data of Chinese securities market, constructs the sub-portfolios which consist of three samples including stock dividend, cash dividend and non-dividend and studies the return of these three types of sub-portfolios with least significant difference method. The results of empirical study show that the income level of cash dividend portfolio is significantly lower than that of stock dividend portfolio and non-dividend portfolio, and the operating condition of listed companies issuing stock dividend is the best ideal, listed companies’ growth decides the choice of dividend policy, stock dividend is the natural choice of listed companies.