Business / Finance Glossary

Dumping: A mortgage contract clause stipulating that the borrower to pay off the full remaining principal on a mortgage if the mortgaged property is sold before the mortgage is paid off.

Duplicative Portfolio: In the context of general equities, offering large amounts of stock with little or no concern for price or market effect.

Dupont System Of Financial Control: Applies mainly to derivative products. Basket of stocks that imitates the price movement of another set of securities (e.g., S&P 500 index).

Duration: Expressing return on assets (ROA) in terms of the profit margin and asset turnover.

Dutch Auction: A common gauge of the price sensitivity of a fixed income asset or portfolio to a change in interest rates.

Dutch Auction Preferred Stock: Auction in which the lowest price necessary to sell the entire offering becomes the price at which all securities offered are sold. This technique has been used in Treasury auctions. Often u . . . View Full Definition

Duty: A form of adjustable-rate preferred stock in which the dividend is ascertained in a Dutch auction process by corporate bidders every seven weeks.

Dwarfs: A tax on imports, exports, or consumption goods.

Dynamic Asset Allocation: Fannie Mae-issued mortgage-backed securities pool that has an original maturity of 15 years.

Dynamic Hedging: 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.

E: A strategy that involves rebalancing hedge positions as market conditions change; a strategy that seeks to insure the value of a portfolio using a synthetic put option.

Each Way: Fifth letter of a Nasdaq stock symbol specifying that an issue has not met the reporting date for the company's SEC regulatory filing requirements.

Early Withdrawal Penalty: A broker's commission from his or her involvement on both the purchase and the sale side of a security.

Earn-Out: The ratio of earnings per share, after allowing for tax and interest payments on fixed interest debt, to the current share price. The inverse of the price-earnings ratio. It is the total twe . . . View Full Definition

Earned Equity Growth: Penalty paid by the holder of a fixed-term investment penalizing an investor who withdraws money before the agreed-upon maturity date.

Earned Income Credit: The annual rate, as a % of equity, at which retained earnings, after dividend payout, are added to equity capital at the beginning of the year.

Earnest Money: A tax credit for taxpayers with children.

Earning Asset: Money given to a seller by a buyer to demonstrate the buyer's good faith. If the deal falls through, the deposit is usually forfeited.

Earning Power: An asset that generates income, e.g., income from rental property.

Earnings: Earnings before interest and taxes (EBIT) divided by total assets.

Earnings Before Interest After Taxes (EBIAT): Net income for the company during a period.

Earnings Before Interest And Taxes (EBIT): A financial measure defined as revenues less cost of goods sold and selling, general, and administrative expenses. In other words, operating and nonoperating profit before the deduction of i . . . View Full Definition

Earnings Before Interest And, Taxes (EBIT): Net income before income tax expense and interest expense. This is a popular measure for comparing the earning power of companies, because it eliminates the impact of capital structure and e . . . View Full Definition

Earnings Before Interest, Taxes, And Depreciation (EBITD): A financial measure defined as revenues less cost of goods sold and selling, general, and administrative expenses. In other words, operating and nonoperating profit before the deduction of i . . . View Full Definition

Earnings Before Interest, Taxes, Depreciation, And Amortization (EBITDA): A financial measure defined as revenues less cost of goods sold and selling, general, and administrative expenses. In other words, operating and nonoperating profit before the deduction of i . . . View Full Definition

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