Business / Finance Glossary

Dirty Stock: Bond price including accrued interest, i.e., the price paid by the bond buyer.

Disability Income Insurance: A stock that fails to fulfill prerequisites to attain good delivery status.

Disbursement Float: An insurance policy that insures a worker in the event of an occupational mishap resulting in disability. Insurance benefits compensate the injured worker for lost pay.

Discharge Of Bankruptcy: A decrease in book cash but no immediate change in bank cash, generated by checks written by the firm.

Discharge Of Lien: The termination of bankruptcy proceedings, resulting in cancellation of the debtor's obligations.

Disclaimer Of Opinion: An order terminating a lien on property.

Disclosure: An auditor's statement that does not express any opinion regarding the company's financial condition.

Discontinued Operations: A company's release of all information pertaining to the company's business activity, regardless of how that information may influence investors.

Discount: Divisions of a business that have been sold or written off and that no longer are maintained by the business.

Discount Bond: Convertible: Difference between gross parity and a given convertible price. Most often invoked when a redemption is expected before the next coupon payment, making it liable for accrued inte . . . View Full Definition

Discount Broker: Debt sold for less than its principal value. If a discount bond pays no coupon, it is called a zero coupon bond.

Discount Factor: A brokerage house featuring relatively low commission rates in comparison to a full-service broker.

Discount Period: Present value of $1 received at a stated future date.

Discount Rate: The period during which a customer can deduct the discount from the net amount of the bill when making payment.

Discount Securities: The interest rate that the Federal Reserve charges a bank to borrow funds when a bank is temporarily short of funds. Collateral is necessary to borrow, and such borrowing is quite limited be . . . View Full Definition

Discount Window: Non-interest-bearing money market instruments that are issued at a discount and redeemed at maturity for full face value, e.g., U.S. Treasury bills.

Discount Yield: Facility provided by the Fed enabling member banks to borrow reserves against collateral in the form of governments or other acceptable paper.

Discounted Basis: The yield or annual interest rate on a security sold to an investor at a discount. A bond that is sold at $4875 that matures to $5000 has a discount of $125. To calculate the discount yield: . . . View Full Definition

Discounted Cash Flow (DCF): To sell below maturity value, so that the difference makes up all or part of the interest.

Discounted Dividend Model (DDM): Future cash flows multiplied by discount factors to obtain present values.

Discounted In-By Market: A formula to estimate the intrinsic value of a firm by figuring the present value of all expected future dividends.

Discounted Payback Period Rule: Unannounced information that is widely accepted or anticipated, and hence is already taken into account in the pricing of the security/ market (e.g., poor earnings).

Discounting: An investment decision rule in which cash flows are discounted at an interest rate and one determines how long it takes for the sum of the discounted cash flows to equal the initial investment.

Discounting The News: Calculating the present value of a future amount. Discounting is opposite to compounding.

Discrete Compounding: 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.

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