Based on the Management Methods of Listed Companies Stock Issuing and Decision on the Revised Regulations of Cash Dividend of Listed Companies promulgated by Securities Supervisory Committee in May 2006 and in October 2008 respectively, this paper makes a study of the effect of cash dividend under the semi compulsory dividend policy on the agency cost control. The study finds that the issuing of cash dividend can effectively curb the over investment levels, but this curbing can only have an effect on the high asset liability rate, highly growing up and non state owned enterprises. Pressed by the demand of re financing, the dividend level of such enterprises increases considerably and it leads to the under investment. Therefore, the semi compulsory dividend policy does not achieve a desired effect.