What is Deregulation? Deregulation is the removal or reduction of government regulations in a specific industry. The goals are to allow industries to operate businesses more freely, make decisions efficiently, and remove corporate restrictions. Overall, the main objective is to remove barriers to competition so that a particular industry can compete in the international market…
What is Depreciation Recapture? Depreciation recapture is a procedure by the Internal Revenue Service (IRS) in the U.S. to collect taxes on the sale of property that’s been depreciated. The property must have been previously used to offset the owner’s ordinary income due to depreciation. Therefore, when you file taxes, the gain from the sale…
What is a Depositary Receipt? A depositary receipt is a negotiable instrument issued by a bank to represent shares in a foreign public company, which allows investors to trade in the global markets. Understanding Depositary Receipts Depositary receipts allow investors to invest in companies in foreign countries while trading in a local stock…
What is Demutualization? Demutualization refers to the process by which a mutual company converts into a public share company. A mutual company is an institution owned by its mutual owners who enjoy exclusive use of its productive assets. Essentially, the company is owned by its users. When a mutual company decides on a legal ownership…
What is a Demand Deposit? A demand deposit is money deposited into a bank account with funds that can be withdrawn on-demand at any time. The depositor will typically use demand deposit funds to pay for everyday expenses. For funds in the account, the bank or financial institution may pay either a low or zero…
What is Accounting? Accounting is a term that describes the process of consolidating financial information to make it clear and understandable for all stakeholders and shareholders. The main goal of accounting is to record and report a company’s financial transactions, financial performance, and cash flows. Accounting standards improve the reliability of financial statements. The financial statements include the…
What is Debt Financing? Debt financing occurs when a company raises money by selling debt instruments, most commonly in the form of bank loans or bonds. Such a type of financing is often referred to as financial leverage. As a result of taking on additional debt, the company makes the promise to repay the loan…
What is a Debt Security? A debt security is any debt that can be bought or sold between parties in the market prior to maturity. Its structure represents a debt owed by an issuer (the government, an organization, or a company) to an investor who acts as a lender. Understanding Debt Securities Debt securities are…
What is a Defensive Stock? A defensive stock is a stock that demonstrates relatively stable performance regardless of the current state of the economy. Defensive stocks are also called non-cyclical stocks, as they are less prone to the economic cycle of expansions and recessions. Defensive stocks will come with a steady dividend payment and a…
