Stock Market Terms By Letter: D


Debenture: A secured borrowing by a firm at a specified rate of interest, maturing on a specified date. Debentures are transferable and may have different priority rankings in terms and maturity. (Similar to Secured Loan Stock).

Debt Capital: The part of the Capital which is provided by borrowings. See also Capital and Equity Capital

Debt to Equity Ratio: A measure of the financial strength of a company by comparing the proportion of the Capital of the firm provided by Debt Capital as against Equity Capital. A common way to compute this ratio is to divide the total interest-bearing debt of a firm by its shareholders equity.

Debtor: A person or corporation who owes money. Thus a customer who owes a firm some money on his purchases is referred to as a Trade Debtor, or ‘Account Receivable’.

Deferred Assets: Assets whose convertibility into cash will take more than 12 months. Deferred Liabilities refer to amounts owing which are payable after 12 months.

Deferred Tax: Tax liability which has already been charged to profit and loss account but which is not yet due for payment until after 12 months or more.

Deflation: A condition of generally falling prices, the opposite to Inflation.

Delist: To remove a quoted company’s shares from the official list and board of quotation at the stock exchange.

Depreciation: A business expense which does not involve real outflow of cash but is deducted from sales revenue nevertheless before profit is derived. Depreciation is taken in order to allow for the diminution in the value of various items of fixed assets.

Depression: A prolonged period of falling consumption, production and prices with widespread unemployment.


Dilution: The lessening of the earnings or dividend capacity of a share by the issue of more new shares.

Diversification: In investment, it means the division of one’s money among many share; so as to reduce the risk of losing it all when a single share goes bad.

Dividend: Amount paid out of profits to shareholders, usually expressed as sen per share or percentage of par value. Hence, Dividend Per Share.

Dividend Cover: The number of times profit is greater than the amount of dividend paid out.

Dividend Multiple (DM): A measure of the value of a share. The number of times at which a share is selling above its dividend. It is obtained by dividing the share price by the Dividend Per Share. A share selling at a low Dividend Multiple can usually be regarded as a cheap share. This is the reciprocal of Dividend Yield (see below).

Dividend Per Share (DPS): Total annual dividend paid out divided by the number of shares outstanding. It can be nett or gross of tax.

Dividend Ranking: The entitlement of newly issued shares to dividend.

Dividend Yield (DY): A very common measure of the value of a share. It is the dividend Per Share divided by the share price. It measures the dividend return from an investment and the higher the return, the cheaper is the investment.

Dividend Withholding Tax: A flat rate tax which is deducted from dividends paid out. This is done by the firm on behalf of the tax department.

Double Taxation Agreement: This refers’ to an agreement between one country and another (or others) to avoid dividends paid out in one country but remitted to the other being taxed at the full rate in both countries. A usual way is to pay dividend without withholding taxes to non-residents but the shareholders are then subject. to tax on the dividend received in his country of residence.

Dow Jones Industrial Averages: The oldest stock exchange index of the world. It is based on 30 of the largest industrial companies listed on the New York Stock Exchange. It is commonly known simply as DJ or DJIA.

Dow Theory: The most important theory of Technical Analysis. This theory holds that stock market moves in cycles and that there are three types of movements: Primary, Secondary and Minor. Each type of movement has a roughly fixed period. Dow Theory is used for Market Timing.