The article explores how non-financial companies in Pakistan decide on their dividend payments. They studied 320 firms listed on the Karachi Stock Exchange from 2001 to 2006. The researchers found that these firms base their dividend decisions on both their current earnings and past dividend payments. Profitable companies with stable earnings tend to pay higher dividends. Companies with concentrated ownership and good market liquidity also pay more dividends. However, firms with high debt levels and excess cash tend to pay lower dividends. Additionally, larger companies and those with higher market value prefer to reinvest in their business rather than pay dividends to shareholders.