Mohit Sardana

CA | Finance Enthusiast

Stock Market Terms

Investment Banking Series D,E,F.
 D Debenture
A debenture is a type of long-term debt security issued
by a company that is not backed by specific assets but
relies on the issuer's creditworthiness for repayment.

Due Diligence
Due diligence is the thorough investigation and analysis
of a company or investment opportunity, typically
performed before a merger, acquisition, or investment
to assess its risks and potential.

Dividend Yield
Dividend yield is a financial ratio that measures the
annual dividend income an investor can expect to
receive from an investment relative to its market price.

Diversification
Diversification is a risk management strategy that
involves spreading investments across different asset
classes or securities to reduce exposure to any single
investment.
 Distressed Asset
A distressed asset is an investment that is financially
troubled, such as a company facing bankruptcy or a
property in foreclosure, often purchased at a discount.

Debt Financing
Debt financing involves raising capital by borrowing
funds, typically through loans or issuing bonds, with
the obligation to repay the principal amount plus
interest over time.

Debt Restructuring
Debt restructuring is a process that modifies the terms
of existing debt agreements to alleviate financial
distress, often negotiated between creditors and the
debtor.
Depository Receipt (DR)
A depository receipt is a financial instrument
representing ownership of foreign securities traded on
a domestic exchange, making it easier for investors to
trade international assets.
E Equity Research
Equity research involves analyzing and providing
insights on publicly traded companies, including
financial performance, market trends, and stock
recommendations.

Employee Stock Ownership Plan

An ESOP is an employee benefit plan that allows
employees to become partial owners of the company
by acquiring shares, often used as a retention and
incentive tool.

Exchange-Traded Fund
An ETF is a type of investment fund and exchange-
traded product with shares that trade on stock
exchanges, offering diversified exposure to various
assets or sectors.

Ex-Dividend Date
The ex-dividend date is the day on which a stock
begins trading without the right to receive the most
recently declared dividend, impacting the stock's price.
 Equity Financing
Equity financing is a method of raising capital by selling
shares of ownership in a company, often to investors, to
fund operations or growth.

Enterprise Value
Enterprise value is a financial metric that represents
the total value of a company, including its market
capitalization, debt, and cash and cash equivalents.

Early-Stage Financing
Early-stage financing refers to the initial investment
rounds in a startup, typically involving seed and Series
A funding, aimed at product development and market
entry.
Earnout
An earnout is a contingent payment arrangement in
mergers and acquisitions, where a portion of the
purchase price is based on future performance
metrics, ensuring alignment between the buyer and
seller.
F Fairness Opinion
A fairness opinion is a professional evaluation provided
by an investment bank to assess whether a proposed
transaction, such as a merger or acquisition, is fair to
the involved parties from a financial standpoint.

Fixed-Income Securities
Fixed-income securities are investments that provide
regular interest payments to investors and return the
principal amount at maturity, such as bonds and notes.

Financial Modeling
Financial modeling is the process of creating
mathematical representations of a company's financial
performance and future projections, often used for
valuation and decision-making.

Follow-On Offering
A follow-on offering is a secondary offering of
additional shares by a publicly traded company, often
to raise capital for expansion or other corporate
purposes.
 Fund of Funds (FoF)
A fund of funds is an investment fund that pools capital
from investors to invest in a portfolio of other
investment funds, offering diversification across
multiple strategies or asset classes.

Fixed Charge Coverage Ratio

The fixed charge coverage ratio is a financial metric
that measures a company's ability to cover fixed
charges, such as interest expenses and lease
payments, with its earnings.

Fiduciary Duty
Fiduciary duty is a legal obligation that requires
individuals or entities to act in the best interests of
their clients or beneficiaries when managing their
assets or providing financial advice.

Foreign Direct Investment (FDI):

Foreign direct investment refers to an investment made
by a company or individual in one country into business
interests located in another country, often with the aim
of gaining control or influence.
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