Equity
Equity is a term which meanings depends on the context. Basically, it is total assets minus total liabilities.
It is a stock (preferred or common), or other security representing ownership.
When we talk about securities, equity is a stock, because it represents ownership of a company. On the other hand, bonds are not consider equity but debt, because they represent an obligation of the company to pay interest on borrowed money.
Also, equity can be found on the balance sheet, and represent fund contributed by the stockholders.
When we talk real-estate, equity is a difference between the current market value of a property and the amount still owed on the mortgage. It also refers to the amount of money owner could receive after selling the property and paying off all the liabilities related to the property.
| Related Terms: 19c3 Stock Debt-Equity Swap Poison Pill Return on Assets (ROA) Return on Equity (ROE) Security Leverage Equity Fund Equity Linked Note – ELN Equity Turnover |