Ownership interest in a corporation’s stock that represents a claim on its revenue and assets.
What is Equity?
Equity refers to the ownership of an asset, most commonly stocks or shares in a company. When an individual or institution buys stocks in a company, they become a shareholder and have a portion of ownership in that company. The value of a person’s equity is determined by the total value of their shares, minus any liabilities or debts they have.
In finance, equity is a term used to describe the residual interest in the assets of a company after deducting liabilities. It represents the portion of the company that is owned by shareholders, and is also referred to as shareholder’s equity or owners’ equity.
Equity can also refer to the value of a property, such as a home, after deducting any outstanding mortgages or liens. In this context, equity represents the portion of the property that is owned outright by the homeowner.
Overall, equity is a measure of ownership and residual interest in assets, and is an important concept in finance and accounting.
