Days
Dales Outstanding (DSO)
The average
length of time required to collect credit sales.
Days
Sales Outstanding (DS0)
The ratio
calculated by dividing accounts receivable by average sales per day;
indicates the average length of time the firm must wait after making
a sale before receiving cash.
Debenture
A long-term
bond that is not secured by a mortgage on specific property.
Declaration
Date
The date
on which a firm's directors issue a statement declaring a dividend.
Default
Risk Premium (DRP)
The difference
between the interest rate on a U. S. Treasury bond and a corporate bond
of equal maturity and marketability.
Defensive
Merger
A merger
designed to make a company less vulnerable to takeover.
Depreciation
The charge
for assets used in production Depreciation is not a cash outlay.
Derivatives
Securities
whose values are determined by the market price or interest rate of
some other asset.
Detachable
Warrant
A warrant
that can be detached from a bond and traded independently of it.
Devaluation
The process
of officially reducing the value of a country's currency relative to
other currencies.
Disbursement
Float
The value
of the checks which we have written but which are still being processed
and thus have not been deducted from our account balance by the bank.
Discount
Bond
A bond
that sells below its par value; occurs whenever the going rate of interest
rises above the coupon rate.
Discount
Interest
Interest
that is calculated on the face amount of a loan but is paid in advance.
Discount
on Forward Rate
The situation
when the spot rate is less than the forward rate.
Discounted
Payback Period
The length
of time required for an investment's cash flows, discounted at the investment's
cost of capital, to cover its cost.
Discounting
The process
of finding the present value of a cash flow or a series of cash flows;
discounting is the reverse of compounding.
Diversifiable
Risk
That part
of a security's risk associated with random events; it can be eliminated
by proper diversification.
Divestiture
The sale
of some of a company's operating assets.
Dividend
Irrelevance Theory
The theory
that a firm's dividend policy has no effect on either its value or its
cost of capital.
Dividend
Policy Decision
The decision
as to how much of current earnings to pay out as dividends rather than
to retain for reinvestment in the firm.
Dividend
Reinvest Plan (DRP)
A plan
that enables a stockholder to automatically reinvest dividends received
back into the stock of the paying firm.
Dividend
Yield
The expected
dividend divided by the current price of a share of stock.
Du
Pont Chart
A chart
designed to show the relationships among return on investment, asset
turnover, the profit margin, and leverage.
Du
Pont Equation
A formula
which shows that the rate of return on assets can be found as the product
of the profit margin times the total assets turnover
.
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