What Is a Discounted Payoff (DPO)? A discounted payoff (DPO) is the repayment of an obligation for less than the principal balance. Discounted payoffs often occur in distressed loan scenarios, but they can also be anticipated through contract clauses in other types of business dealings. Key Takeaways A discounted payoff is the repayment of an
What Is a Discount Margin—DM? A discount margin (DM) is the average expected return of a floating-rate security (typically a bond) that’s earned in addition to the index underlying, or reference rate of, the security. The size of the discount margin depends on the price of the floating- or variable-rate security. The return of floating-rate
What Is Dilution? Dilution occurs when a company issues new shares that result in a decrease in existing stockholders’ ownership percentage of that company. Stock dilution can also occur when holders of stock options, such as company employees, or holders of other optionable securities exercise their options. When the number of shares outstanding increases, each
What Is a Dilutive Acquisition? A dilutive acquisition is a takeover transaction that decreases the acquirer’s earnings per share (EPS) through lower (or negative) earnings contribution or if additional shares are needed to be issued by the acquiring company to pay for the acquisition. Key Takeaways A dilutive acquisition is a takeover transaction that decreases
What Is a Dim Sum Bond? “Dim sum bond’ is a slang term for bonds denominated in Chinese renminbi and issued in Hong Kong. Dim sum bonds are attractive to foreign investors who desire exposure to renminbi-denominated assets, but are restricted by China’s capital controls from investing in domestic Chinese debt. The term is derived
What Is Dual Income, No Kids (DINK)? “Dual income, no kids” (DINK) is a slang phrase for a household in which there are two incomes and no children. Couples living in a DINK household frequently have more disposable income because they do not have the added expenses that come with children. They also often spend
What Is the Direct Method? The direct method is one of two accounting treatments used to generate a cash flow statement. The statement of cash flows direct method uses actual cash inflows and outflows from the company’s operations, instead of modifying the operating section from accrual accounting to a cash basis. Accrual accounting recognizes revenue
What Does Direct Access Trading Mean? Direct access trading (DAT) is a technology system that enables stock traders to trade directly with another client, a market maker on Nasdaq, or a specialist on the floor of an exchange, all without broker interference. Understanding Direct Access Trading (DAT) Direct access trading (DAT) is the preferred trading
What Is a Direct Consolidation Loan? The term direct consolidation loan refers to a type of federal loan that combines two or more federal education loans into a single loan. A direct consolidation loan comes with a fixed interest rate that is based on the average rate of the loans that are consolidated. Consolidating through the
What Is a Direct Cost? A direct cost is a price that can be directly tied to the production of specific goods or services. A direct cost can be traced to the cost object, which can be a service, product, or department. Direct and indirect costs are the two major types of expenses or costs
