This article is from the Glossary of Stock Investing Terms.
An order to buy or sell a security that automatically expires if not executed on the day the order is placed.
A company can raise working capital by issuing bonds or notes to individuals or institutions, along with a promise to pay interest as well as to repay the principal. The other major way of raising capital is to issue shares of stock in a public offering.
The repayment of interest and principal of an debt.
A measure of a company's financial leverage, calculated by dividing long term debt by shareholders' equity. A higher debt/equity ratio generally means that a company has been aggressive in financing its growth with debt, which can result in volatile earnings as a result of the additional interest expense.
The date on which a company's Board of Directors meet to announce the date and amount of the next dividend payment. Once the payment has been authorized, it is known as a Declared Dividend, and becomes a legal liability that must be paid.
On the balance sheet, deferred taxes are a liability that result from income already earned and recognized for accounting purposes but not for tax purposes.
An expense recorded regularly on a company's books to reduce the value of a long-term tangible asset. Since it is a non-cash expense, it increases free cash flow while decreasing the amount of a company's reported earnings.
A security, like an option or future, whose value is derived from another underlying security.
A significant fall in the value of a currency, as compared to gold or another country's currency.
Dilution is the effect on a company's earnings per share caused by the conversion of convertible securities or the issuance of additional shares of stock. Dilution reduces earnings per share by increasing the number of shares potentially outstanding.
Over one hundred companies have registered with the Securities and Exchange Commission to sell shares of their stock directly to investors. Investors typically participate in that company's Dividend Reinvestment Plan.
The process of mixing a variety of different investments, types of industries, categories of risk or companies in order to reduce the risk in a portfolio.
A share of a company's earnings that are authorized by a company's Board and paid (generally in cash) to a class of shareholders, usually quarterly.
Abbreviated as DRIPs or DRPs. Plans offered by many corporations for the reinvestment of cash dividends by purchasing additional shares or fractional shares, on the dividend payment date, occasionally at a discount from market price. Many DRIP's also allow the investment of additional cash from the shareholder, known as an Optional Cash Payment or Optional Cash Purchase (OCP). The DRIP is usually administered by the company without charges or with just nominal fees to the participants, and many allow additional purchases of as little as $10.
The annual dividends paid by a company divided by its current stock price.
"Do Not Reduce." Abbreviation used on an buy or sell order to tell the broker not to decrease the limit price on buy-limit and sell-stop orders on the record date of a cash dividend.
A technique of buying a fixed dollar amount of a particular investment on a regular schedule, regardless of the share price; thus purchasing more shares when prices are low, and fewer shares when prices are high. Over time, the average cost per share of the security will become smaller. This method attempts to lessen the risk of investing a large amount in a single investment at the wrong time. Used with mutual funds and dividend reinvestment plans.
The process of disclosure to investors of all material information pertinent to an issue.