FINANCIAL GLOSSARY








Below is a glossary of financial terms written by us.
Simply click on a term to access its definition.
[For a correct use of this glossary, please consult these "notes"]

puce DAX 100

A price-weighted index of the 100 most heavily traded stocks in the German market.
See also Index.

puce Deal

A proposal for financing a business creation or expansion.
More generally, any contract or arrangement.

puce Deal Flow

As far as venture capital is concerned investment opportunities offered to an investor.

puce Dealbreaker

Fact which causes a transaction not to be completed.

puce Debenture

A note or bond usually backed only by the general credit of a company, and not secured by specific property.

puce Debt

An obligation to pay money at a stated time.

puce Debt Capital

Capital (liabilities) raised through the issuance of bonds.

puce Debt Financing

A measure of a company's leverage, calculated by dividing long-term debt by shareholders' equity.

puce Debt Ratio

Debt capital divided by total capital.

puce Debt/ Equity Ratio

A measure of a company's leverage, calculated by dividing long-term debt by shareholders' equity.

puce Default

A company's failure to discharge an obligation, i.e. to pay interest or principal on a debt when due.

puce Default Risk

As regards venture capital the difference between the expected rate of return and the promised rate of return on an investment.

puce Defined Contribution Plan (USA)

A retirement plan in which the employer's obligation is to make a contribution into the plan and the employee bears the risk of investment performance.
The opposite of a defined benefit plan where the employer's obligation is to make a payment and to bear the risk of investment performance.

puce Delta Factor

The delta of an option measures the sensitivity of the price of an option compared with the price variations of the underlying asset.
Example: when delta is 0.5 ( = 50% ), the option gains CHF 0.50 when the stock price increases by CHF 1.00.

puce Demand Registration Rights (USA)

The contractual right of a security holder to require an issuer to file a registration statement to register the holder's securities so that the holder may sell them in the public market without restrictions.
See also Piggy-Back Registration Rights and Registration Rights.

puce Deposit bank

puce Depreciation

Reduction of value by the acknowledgement of loss through an accounting process.
The act of depreciating assets, as is usually done for tax purposes, is property depreciation.

puce Derivate Instrument

puce Derivative or Derivative Security

A financial instrument or security whose characteristics and value depend upon the characteristics and value of an underlying instrument or asset.
Examples include futures, options, and mortgage-backed securities.

puce Development Stage Capital/Fund

Venture capital financing in connection with a company’s start-up phase. This is typically the highest-risk phase of venture capital financing from the investor’s perspective. A “Development Stage Fund” is focusing on development stage financing.
See Mezzanine Capital/Fund and Pre- IPO Capital/Fund.

puce Dilution

Reduction in the percentage ownership of a given shareholder in a company as a result of the issuance of new shares.

puce DINGO

[Don't Invest - No Growth Opportunity].
Recommendation not to invest.

puce Direct Public Offering

A public offering in which shares are sold directly to investors rather than through underwriters.

puce Discount Rate

Rate used to compute the present value of future cash flows by discounting them.

puce Discounted Cash Flow

Discounted cash flow applies a discount rate to future cash flows to establish their present worth.
See also Net Present Value.

puce Diversification

puce Divestiture

Disposition or sale of an asset by a company.
A company will often divest an asset which is not performing well, which is not vital to the company's core business, or which is worth more to a potential buyer or as a separate entity than as part of the company.

puce Dividend

puce DJIA

[Dow Jones Industrial Average]
An index based on 30 major stocks listed on the NYSE.
The companies included in the DJIA are all major factors in their respective industries, and their stocks are widely held by individuals and institutional investors.
The DJIA is one of the oldest and most widely recognized stock indexes and has been published daily for more than 100 years.

puce Down Round

An equity financing where shares are sold at a price below the previous financing.

puce Downside Protection

A measure that limits the loss resulting from the possible decline in a security or a market, i. e. via the purchase of a Put option.
See also Put Option

puce Downturn

A negative change, i. e. of the economy, of a company's business or of a market.

puce Drag-along Rights

See Bring-Along Rights.

puce Drawdown

When an investor commits himself to invest in a Private Equity fund he initially pays in only part of his commitment.
The difference is drawn down later in line with the investment activity.
The amount that is drawn is defined as Contributed Capital.

puce DTC (USA)

[Depository Trust Company]
DTC is the world's largest securities depository.
It serves as a clearing house for the settlement of securities trades and performs securities custody related services for its participating banks and broker-dealers.
DTC is owned by members of the financial industry who are its users.

puce Dual Listing

A security which is listed on two or more exchanges.

puce Dual Trading Facility

Approval given by a stock exchange to trade a stock that is already traded on another exchange, and where the company does not raise any capital as part of the admission process.

puce Due Diligence

An examination of the books of an issuer and interviews with officers, partners, lawyers, auditors etc. to confirm information about the issuer's business as well as legal and accounting affairs.
It typically includes a review of such matters as significant customers and suppliers; the background of key employees ;material contracts; facilities; real property owned; subsidiaries; legal proceedings; insurance; patents and other intellectual property rights; licenses and permits; tax status, indebtedness on its own.

puce Duration

The duration differs from the residual life of a bond or debenture in the sense that it measures the average length of time a capital is committed.
Allows to measure the sensitivity of the price of a security to the variations of interest rates (modified duration).





 

OÙ CHERCHER