The Illustration for Agency Cost Theory of Listed Companies Dividend Policy

In 1970s,the America scholars, Jensen and Meckling,systematically illustrated the Theory of agency in their co-written paper,which initially introduced it to the field of company financing. Agency cost theory shares the referenced value in the development of financing theory of modern enterprises. And the agency cost theory of dividend policy has been fully positive-verified in the western mature security markets. This article, resulted from agency cost theory of dividend policy, discusses about how stock holders solve the agent problem and decrease the agency cost by the cash dividend of listed companies.