ABSTRACT
H1: Enterprise value negatively related to ownership concentration.
2.2 Literature review of relationship between dividend policy and enterprise value
Modigliani and Miller (1961) proposed the dividend irrelevant theory. They assumed that with no taxes or bankruptcy costs, dividend policy is irrelevant to enterprise value. Limner (1956) suggests that dividend policy can covey information of corporations’ future performance. Yuan (2001) analyzed the A-share listed companies, and found dividend payment will promote enterprise value and the relative level of dividend policy negatively correlation with enterprise value, while the absolute level of dividend policy positively correlation with enterprise value. Dong (2011) found enterprise value positively correlated with stable cash dividend per share by researching the correlation of company’s cash dividend policy and enterprise value. Hence, we proposed the following hypothesis.
