D

Glossary · PSX term

Dividend policy.

A dividend policy is a company's stated approach to how much profit it returns to shareholders.

Definition

Some companies aim for a steady payout ratio, others prioritise reinvestment for growth, and the choice signals management priorities. A consistent policy helps income-focused investors plan.

Worked example

A mature utility may target paying out 70% of earnings, while a growth firm reinvests most profit.

Related on PSX Clarity

Retained earnings

More glossary terms

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Dividend yield shows annual dividend income as a percentage of the current share price. It helps PSX investors compare income from different stocks, but it should be reviewed with payout history, earnings quality, and whether the dividend is sustainable.

Debt-to-equity ratio

Debt-to-equity ratio compares a company's borrowings with shareholder equity. It helps investors understand leverage and balance-sheet risk.

Delisting is the removal of a company's shares from trading on the exchange.

Dilution is the drop in each existing share's ownership when a company issues new shares.

Day trading is buying and selling the same stock within a single trading session.

Deliverable futures

Deliverable futures are PSX contracts where actual shares are delivered when the contract expires.

Disclosure is a company's duty to publicly share information that could affect its share price.

Dividend discount model

The dividend discount model values a stock as the present value of its expected future dividends.

Discounted cash flow (DCF)

DCF values a company by estimating its future cash flows and discounting them to today's value.