transactions-commercial paper, bank CDs, bills, bonds, and other instruments. Debt service Interest payment plus repayments of principal to creditors (retirement of debt). Debt service coverage The ratio of cash flow available to the borrower to the annual interest and principal payments on a loan or other debt. Debt-service coverage ratio Earnings before interest and income taxes, divided by interest expense plus the quantity of principal repayments divided by one minus the tax rate. Debt service parity approach Payment alternatives that provide the firm with the exact same schedule of after-tax debt payments (including both interest and principal). Debt swap A set of transactions in which a firmbuys a country's dollar bank debt at a discount and swaps this debt with the central bank for local currency that it can use to acquire local equity. Also called a debt-equity swap. Debtholder See: Bondholder Debtor Borrower of money. Debtor in possession A firm that continues to operate under the Chapter 11bankruptcy process. Debtor-in-possession financing New debt obtained by a firm during the Chapter 11bankruptcy process, Federal Bankruptcy Rule 4001 (c)(1). This financing is unique because it is secured, that is, it has priority over existing debt, equity and other claims. Decile rank Performance over time, rated on a scale of 1-10. 1 indicates that a mutual fund'sreturn is in the top 10% of funds being compared; while 3 means the return is in the top 30%. Decimal trading The quotation and trading of stock or bond prices in decimals, as opposed to the quotation of prices in fractions. Decimalization The quotation and trading of stock or bond prices in decimals, as opposed to fractions such as eighths. Decision Break-Point Analysis A type of sensitivity analysis that indicates the value at which a key variable will result in a negative NPV for an investment project. Decision tree Schematic way of representing alternative sequential decisions and the possible outcomes from these decisions. Declaration date The date on which a firm'sdirectors meet and announce the date and amount of the next dividend. Declaration The Board of Directors motion to authorize dividend payments. Dedicated capital Total par value (number of sharesissued, multiplied by the par value of each share). Also called dedicated value. Dedicating a portfolio Related: Cash flow matching Dedication strategy Refers to multiperiod cash-flow matching. Deductible An amount or period which must be deducted before an insurance payout or settlement is calculated. Deductible contribution Amount paid into an IRA, an employer-sponsored retirement plan, or other type of retirement plan for a particular tax year that is a deduction from income for tax purposes. Deduction An expense that is allowable as a reduction of gross taxable income by the IRS e.g., charity donations. Deductive reasoning Using known facts to draw a conclusion about a specific situation. Deed of trust See: Indenture Deep-discount bond A bondissued with a very low coupon or no coupon that sells at a price far below par value. A bond that has no coupon is called a zero-coupon bond. Deep in the money A call option with an exercise price substantially below the