What is the Dividend Irrelevance Theory? Dividend Irrelevance Theory is a financial theory that claims that the issuing of dividends does not increase a company’s potential profitability or its stock price. It suggests that investors are not better off owning shares of companies that issue dividends than shares of those that do not. Stock Price and…
What is Derived Demand? In economics, derived demand happens when the demand for a resource or intermediate good is a result of the demand for the final good or service. It was first introduced by Alfred Marshall in 1890 in his book, “Principles of Economics.” The market price of the derived product can be significantly…
What is Deleveraging? Deleveraging is a process undertaken by a company to reduce the amount of total debt. It is an extreme measure carried out by an entity to pay off its obligations and existing debt on its balance sheet. If the company cannot deleverage in time, it may face the risk of defaulting on…
What is the De Minimis Tax Rule? The de minimis tax rule is a law that governs the treatment and accounting of small market discounts. Translated “about minimal things,” the de minimis amount determines whether the market discount on a bond is taxed as capital gain or ordinary income. The de minimis tax rule states…
What is a Decision Support System (DSS)? A decision support system (DSS) is an information system that aids a business in decision-making activities that require judgment, determination, and a sequence of actions. The information system assists the mid- and high-level management of an organization by analyzing huge volumes of unstructured data and accumulating information that…
What is Disability Insurance? Disability insurance is a type of insurance protecting workers when they lose employability and earned income due to becoming disabled. In the case of disability, the worker will be compensated by disability insurance. The main purpose of disability insurance is to protect workers against disability risk. Disability insurance is usually funded…
What is Development Economics? Development economics is a branch of economics that focuses on the economics of country development. It focuses on how people in a society can escape poverty and enjoy a better standard of living. Aspects of Development Economics Country development and development economics both involve a wide range of studies. Primarily, development…
What is a Dealer Market? A dealer market is a financial market where dealers post prices they would be willing to buy and sell specific securities on their own account. Dealers act as “market makers” by adding liquidity and are able to create a market by posting their offer price and bid price electronically. The…
What is Debtor in Possession (DIP)? Debtor in Possession (DIP) is a form of financing that is provided to companies that filed for Chapter 11 bankruptcy. Used to restructure, DIP financing provides capital funding for an organization while bankruptcy runs its course. DIP Financing vs. Regular Financing Debtor in Possession Financing: A form of financing…
What is Bancassurance? Bancassurance refers to an agreement between a bank and an insurance company. In bancassurance, the insurance company can use the bank’s distribution channels to sell products. Banks, in return, receive a certain fee from the insurance company. History of Bancassurance Bancassurance as a term first appeared in France in…
