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 Investors Glossary E

 Earnings Before Income Taxes (EBIT) - Net income earnings of a company before payment of all income taxes.

 Earnings Per Share (EPS) - Measure of a company’s earnings expressed per share of common stock outstanding; equals net income earnings before taxes divided by common shares outstanding. (See "Fully Diluted Earnings," "Primary Earnings")

 Effective Date - Date when an initial public offering (IPO) begins trading, in most cases, 20 days after the filing of the offering statement.

 Employee Stock Ownership Plan (ESOP) - Plan where employees of a company are entitled to buy shares of stock in the company, often at a favorable price and subject to restrictions on resale. Sometimes called an employee stock option plan, where employees earn or are awarded options to purchase shares at a specified price.

 Equity - Security representing ownership in a company and includes common stock, preferred stock, partnership interests, etc. Also describes the value of a particular account or person’s worth after debts have been subtracted from assets. In a margin account, equity is the liquidation value of a client’s account.

 Equivalent Taxable Yield - Yield required for a tax-free bond or other tax-free security to equal the after-tax yield of a corporate or taxable bond; the comparison also must take into account an investor's tax bracket.

 Eurodollar - U.S. currency held in European bank accounts.

 Ex-Dividend - Interval between the announcement and payment of the next dividend; the buyer does not receive the dividend when the security is purchased ex-dividend. The beginning of this interval is known as the ex-dividend date. (See "Dividend")

 Execution - Common term for completion of a transaction or customer trade order.

 Exempt Security - Security issued by a company but, exempt from a registration statement; some may be issued subject to trading restrictions on trading, while others may be free-trading immediately upon issuance or after a prescribed period of time. (See "Regulation D," "Regulation S," "Rule 144")

 Exercise Price - Specified price of an option at which the contract may be exercised for the purchase (call) or sale (put) of the shares of underlying stock; also known as "strike price."

 Expense Ratio - Ratio of a mutual fund's expenses per $100 of investment. For example, a fund with an expense ratio of 0.93 spends $0.93 per $100 of its average net asset value to manage the fund, including overhead, but not sales costs incurred in the marketing of the fund to potential investors.

 Expiration Date - Date when an options contract or warrant expires. Unless the holder exercises his rights, the contract becomes worthless or void after said date. In exchange-traded stock options, the expiration date always falls on the Saturday after the third Friday of the month of the contract.

 Extraordinary Income/Loss - Entry on corporate financial statements referring to one-time or non-recurring events such as income from the sale of assets or losses from a write-off of inventory.