Open Access

Does high dividend payout protect investors?

A case study of Chihong Zinc & Germanium
  • Xianhua Zhou1 and
  • Changjiang Lü2
Frontiers of Business Research in ChinaSelected Publications from Chinese Universities20082:25

Received: 12 January 2008

Published: 30 July 2008


This paper studies the relationship between dividend payout and investor protection through the case of Chihong Zinc & Germanium’s (Chihong) reform of nontradable shares. Results show that Chihong’s nontradable share reform integrated with equity offering may usurp the interest of small shareholders. Statistics manifest that market responds negatively to this type of dividend allocation. Managerial suggestions are also provided.


nontradable shares reformexpropriationdividend payout