Glossary

• Discounted cash flow (DCF)
  Future cash flows multiplied by discount factors to obtain present values.
  
  
• Discounted dividend model (DDM)
  A formula to estimate the present value of a firm's expected future net cash flows discounted by the required rate of return of a firm by figuring the present value of all expected future dividends.
  
  
• Double taxation
  Government taxation of the same money twice; specifically, taxation of earnings at the corporate level and dividends at the stockholder level.
  
  
• Downsizing
  A company's reduction in the number of employees, number of bureaucratic levels, and overall size in an attempt to increase efficiency and profitability.
  
  
• Downstream
  The transfer of corporate activity from the larger parent to the smaller subsidiary.
  
  
• Depreciate
  To allocate the purchase cost of an asset over its life.
  
  
• Depreciated cost
  In terms of economics: The measure of capital consumption during production, e.g., machine and equipment wear. In terms of finance: The process of amortization of fixed assets (equipment) to spread the cost over the depreciable life of the assets.
  
  
• Depreciation
  A non-cash expense (also known as non-cash charge) that provides a source of free cash flow. Amount allocated during the period to amortize the cost of acquiring long-term assets over the useful life of the assets. To be clear, this is an accounting expense not a real expense that demands cash. The sum of depreciation expenses of prior years leads to the balance sheet item Accumulated Depreciation.
  
  
• Disinflation
  A decrease in the rate of inflation.
  
  
• Distress sale
  The selling of assets under adverse conditions, e.g., an investor may have to sell securities to cover a margin call.
  
  
• Discounting the news
  An adjustment of a stock's price as speculators bid the price up or down in anticipation of news about the company, whether good or bad.
  
  
• Distributing syndicate
  A syndicate consisting of a number of brokerage firms or investment bankers that work together to sell and disperse a large lot of securities.
  
  
• Divestiture
  A complete asset or investment disposal such as outright sale or liquidation.
  
  
• Dividend yield (Stocks)
  Indicated yield represents annual dividends divided by current stock price.
  
  
• Double-tax agreement
  Agreement between two countries that taxes paid abroad can be offset against domestic taxes levied on foreign dividends.
  
  
• Due dilengence
  An internal audit of a target firm by an acquiring firm. Offers are often made contingent upon resolution of the due diligence process.
  
  
• Due diligence meeting
  Meeting legally required to be held by an underwriter to enable brokers to question a new issuer about an upcoming issue.
  
  
• Dynamic asset allocation
  An asset allocation strategy in which the asset mix is shifted in response to changing market conditions, as in a portfolio insurance strategy, for example.