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A B C D E F-H I J-L M N-O P Q-R S T U-Z DCF See Discounted cash flow. Chapter 3.
De facto An equitable defense to individual liability predicated on defective incorporation. A de facto corporation exists when an individual makes a good faith but ineffective attempt to incorporate. Chapter 5.
De jure A corporation that has substantially complied with all mandatory provisions that are intended to be conditions precedent to incorporation. Chapter 5.
Deadlock An impasse among directors or among shareholders. Chapter 16.
Deal protective measures Acquisition agreement clauses that are designed to ensure that a transaction closes. Chapter 17.
Debentures Debt securities issued by a corporation that are typically unsecured. Chapter 6.
Debt A temporary investment in a corporation that entails mandatory periodic interest payments and a return of the investment. A loan. Chapter 6.
Declared A dividend is declared when the board of directors authorizes the corporation to pay it. Chapter 7.
Default See Counterparty risk. Chapter 3.
Defeased A loan that the corporation repays out of a trust in which sufficient assets have been set aside to repay the loan in full. Chapter 6.
Defective incorporation The situation in which obligations are incurred in the name of a corporation that has not yet been formed. The corporation's promoter may be individually liable for such obligations. Chapter 5.
Defensive measures Actions taken by a target corporation's board to defeat raiders after a raid has begun. Chapter 17.
Definitive agreement The written acquisition contract between corporations. Chapter 17.
Demand excused Shareholder-plaintiff may file a derivative suit without making demand on the board if he or she can demonstrate that prior demand would have been "futile" because the board could not have evaluated the demand fairly. Chapter 15.
Demand refused A board's refusal to grant a shareholder's demand that the corporation redress harm caused to it. If the refusal was wrongful, the shareholder can file a derivative suit. Chapter 15.
Derivative action A lawsuit filed by shareholders on behalf of the corporation to redress harm to the corporation that the board will not redress. Chapter 15.
Diluted A reduction in a shareholder's ownership interest caused by the issuance of more shares. Chapter 6.
Disclosed principal A principal whose identity is known to a third party. Chapter 4.
Discount rate The rate used to calculate the present value of future money. The discount rate is an interest rate in reverse. Chapter 3.
Discounted cash flow A method of valuing an asset that will generate money in the future. It involves projecting net cash flows for a determined period, setting a terminal value of the asset at the end of the projected period, and then discounting those values at a set rate to determine the net present value. Chapter 3.
Discounting to present value The process of determining how much money one needs to invest today to receive a given amount at a certain time in the future. Chapter 3.
Dissenter's right Right of a dissenting shareholder to sell his or her shares to the corporation for fair value when the corporation engages in certain fundamental changes such as a merger or sale of all assets. Chapter 17.
Dissociated When a partner ceases to be a co-owner of a partnership. Chapter 18.
Dissociation The process by which a partner ceases to be a co-owner of a partnership, and his or her interest is bought out by the partnership. Chapter 18.
Dissolution The process by which a partnership or an LLC ceases to exist. All assets are disposed of, all creditors are paid, and the partners or members receive distributions of the any remainder. Chapter 18 and Chapter 19. Distribution The transfer of partnership or LLC property (usually cash) to partners or members. Chapter 18 and Chapter 19.
Diversification Investing in assets that respond differently to particular risks. Diversification can reduce overall risk while preserving the assets' expected return. Chapter 3.
Dividend A distribution of the increased value (or part of it) of a corporation to its shareholders. Chapter 7.
Domestic corporation A corporation incorporated within the state. Chapter 5.
Double taxation Income earned by a corporation is taxed twice. Once when earned by the corporation and again when distributed to shareholders as a dividend. Chapter 20.
Dough-ray-mi Money.
DTC Depository Trust Company; an entity that acts as a custodian of shares and credits or debits the accounts of brokerage houses. Chapter 15.
Ducats Money.
Due diligence The acquiring corporation's investigation of a corporation to be acquired. Chapter 17.
Duty of care The fiduciary duty of a director to act on an informed basis or with the care that a person in a like position would reasonably believe appropriate under similar circumstances. Chapter 12.
Duty of loyalty The fiduciary duty of a director to take and approve only those actions the director believes to be in the corporation's best interest. Chapter 11. |