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Finance GlossaryDividend Payout Ratio
Dividend Payout Ratio
Definition of Dividend Payout Ratio
The Dividend Payout Ratio refers to dividends paid to shareholders as a percentage of the net income or Earnings Per Share (EPS) of a company. The formula to calculate dividend payout ratio is:
DPR = Dividend / Net income
or
DPR = Dividend / Earnings Per Share
A higher dividend payout ratio means that a company is redistributing a chunk of its profits to shareholders, which generally implies that the company is well-established.
DPR = Dividend / Net income
or
DPR = Dividend / Earnings Per Share
A higher dividend payout ratio means that a company is redistributing a chunk of its profits to shareholders, which generally implies that the company is well-established.
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In fixed income, Modified Duration is a measure used to estimate the sensitivity of a bond’s price with respect to changes in interest rates. It shows the approximate percentage change in a bond’s price for a 1% change in yield, helping investors assess and manage interest rate risk.
Long-Term Capital Gain Tax
Long-term capital gain tax is the tax imposed on profits from selling shares or financial securities held for a period of at least three years. The tax rate applied is typically lower than the short-term capital gains tax, which are profits from the sale of shares held for a shorter duration.
Block Trade
A block trade is a substantially large buy or sell order for a stock, commodity, or other security. Block trades are typically done by institutional investors like hedge funds, mutual funds, and others to mask the true size of the transaction.
Shares change hands between companies after the price of the security is privately negotiated. Most block trades are routed through investment banks and executed outside the conventional market.
Shares change hands between companies after the price of the security is privately negotiated. Most block trades are routed through investment banks and executed outside the conventional market.
Consolidated Financial Statements
A consolidated financial statement is a record of all the assets, liabilities, income, expenses, and other financial data of a company and its subsidiaries.
Index Futures
Index futures are derivative instruments that track an underlying sectoral, thematic, or benchmark index like Nifty Bank, Finnifty, Nifty 50, and others. While trading index futures, a trader avoids individual share risk by trading an entire index.
Price Action
Price action is the movement of the price of a security plotted over time. Traders who study price action make trading decisions based on the analysis of raw price movements, which often includes patterns, swings, and support/resistance levels rather than relying on traditional technical indicators. Price action analysis is the skill of interpreting the sentiments and activities of the market by reading candlesticks, bar charts, and volume data.
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