What Is the Dividends Received Deduction (DRD)? The dividends received deduction (DRD) is a federal tax deduction in the United States that is given to certain corporations that get dividends from related entities. The amount of the dividend that a company can deduct from its income tax is tied to how much ownership the company
What Is a Dividend Rollover Plan? A dividend rollover plan—also known as a dividend capture strategy—is an investment strategy in which the investor purchases a dividend-paying stock shortly before its ex-dividend date. The investor then sells the shares shortly after the dividend is paid, hoping to secure a short-term income stream. Key Takeaways A dividend
What Is Dividend Selling? Dividend selling refers to a dishonest sales tactic used by some unethical brokerage firms. It consists of recommending the purchase of a dividend-paying company to a client, shortly before the payment date of that dividend. This sales pitch, which would typically be made to financially unsophisticated clients, involves conveying the impression
What Is Disruptive Innovation? Disruptive innovation refers to the innovation that transforms expensive or highly sophisticated products or services—previously accessible to a high-end or more-skilled segment of consumers—to those that are more affordable and accessible to a broader population. This transformation disrupts the market by displacing long-standing, established competitors. Key Takeaways Disruptive innovation refers to
What Is Disruptive Technology? Disruptive technology is an innovation that significantly alters the way that consumers, industries, or businesses operate. A disruptive technology sweeps away the systems or habits it replaces because it has attributes that are recognizably superior. Recent disruptive technology examples include e-commerce, online news sites, ride-sharing apps, and GPS systems. In their
What Is Dissaving? Dissaving is spending money beyond one’s available income. This may be accomplished by tapping into a savings account, taking cash advances on a credit card, or borrowing against future income via a payday loan. Understanding Dissaving To state it concisely, dissaving is living beyond one’s means. Negative savings is another term associated
What Is a Distress Sale? A distress sale—also called a distressed sale—occurs when a property, stock, or other asset must be sold quickly. Distress sales often result in a financial loss for the seller who, for reasons of economic duress, must accept a lower price. The proceeds from these assets are most often used to
What Is Distress Cost? Distress cost refers to the expense that a firm in financial distress faces beyond the cost of doing business, such as a higher cost of capital. Companies in distress tend to have a harder time meeting their financial obligations, which translates to a higher probability of default. Distress costs may extend
What Is a Distressed Borrower? A distressed borrower is a borrower who is unable to fully repay their debt on time, due to financial difficulties. A distressed borrower can be either a person or a business whose income falls due to unforeseen circumstances. The situation may invoke a collection agency. Distressed borrowers can also become distressed
What Are Distressed Securities? Distressed securities are financial instruments issued by a company that is near to—or currently going through—bankruptcy. Distressed securities can include common and preferred shares, bank debt, trade claims, and corporate bonds. A particular security can also be considered distressed if it fails to maintain certain covenants (obligations incorporated into the debt or security, such
