Multiple dividends in one year and stock price synchronicity of listed firms

Listed firms’ multiple dividends a year has gradually become the new normal of China’s capital market. However, the decision-making mechanism of this financial behavior has not been fully explained. From the perspective of information theory, this paper discusses the internal motivation of listed companies’ multi dividend behavior in one year. The study found that the higher the dividend frequency of listed companies, the lower the synchronization of stock prices, indicating that high-frequency cash dividend distribution is conducive to improving the efficiency of stock pricing of listed companies, and multiple dividends in a year can effectively play the role of market value management. Mechanism analysis shows that multiple dividends in a year can not only attract investors’ attention, but also improve the accuracy of analysts’ forecasts, thereby reducing the synchronization of stock prices. The heterogeneity analysis shows that in the “bear market” stage of China’s capital market, when the cash dividend level of listed companies is lower than the dividend ability and the cash dividend stability is higher, the reduction effect of listed companies’ increasing the frequency of cash dividend distribution and stock price synchronization is more significant.