Importance: 0.57

Is a company: no

Is a proper noun: no


  • stake
  • holding
  • closely held
  • ownership
  • share
  • common interest
  • privately held
  • assets
  • backing
  • close corporation

Definition of Equity

  1. A claim or interest in a business or asset that represents ownership. Some equity is traded as a security through shares on a stock exchange, while some equity is privately traded between two parties. For example, the shareholders of a corporation have equity in, and by extension partial ownership of, the corporation. Likewise, venture capitalists provide funds to startup companies in exchange for equity in the business.
  2. The value of a property minus outstanding mortgage debt and other liens. Equity is the portion of your property that you have already paid for plus the appreciation, if any, in the value of the property since it was purchased.

Related Terms and Acronyms

  • Securities/Investment Dealer Bank,
    • One who acts as the agent for another party to buy and sell securities and other investments; also an underwriter.
  • Illiquid Asset Bank,
    • An asset that cannot be sold easily or in a timely manner for its full value.
  • Startup Company Definition,
    • A recently founded company that works on new products and services.
  • Ratio Bank,
    • Comparison of two figures used to evaluate business performance, such as debt/equity ratio and return on investment.
  • Home Equity Line of Credit (HELOC) Bank, Very Important,
    • An open-ended loan, paid as revolving debt, that is backed by the equity in the property.
    Also known as a Home Line of Credit.
  • Swap Bank,
    • An agreement between two businesses to exchange commodities, payments or other financial products to reduce the risk of volatile market conditions or to obtain a better price or rate. For example, interest rate swaps, where floating rate interest is exchanged for fixed rate interest, protects a corporation against rises in rates or allows it to take advantage of a better rate. A cross-currency swap enables two parties to enter into an agreement in which one exchanges its currency for the other's to meet their separate requirements.
  • Initial Public Offering (IPO) Bank,
    • When shares of a corporation become available to the public for the first time.
  • Private Equity Bank,
    • Equity not traded on a stock exchange.
  • Holding Period Bank,
    • The length of time a capital asset is owned. Assets held 12 months or less are short-term; those owned more than 12 months are long-term properties.
  • Security Bank,
    • A tradable financial implement that represents ownership, the rights to ownership or debt.
    • A document stating ownership of a stock or bond.
    • Property designated as collateral.
  • Stock Bank,
    • A share of the ownership of a company.
  • Dividend Bank,
    • Distribution of earnings to shareholders. In credit unions, it's the money paid to members for deposits, similar to the interest banks pay to their customers for deposits.
  • Issuer Bank,
    • A legal entity that develops, registers, and sells securities including stocks, bonds and derivatives.
  • Common Stock (CS) Bank,
    • A security that allocates partial ownership in a corporation, but at a lower standing than preferred stocks.
  • Sole Proprietorship Bank,
    • A business owned by an individual where no legal distinction is made between the business and the owner.
  • Return on Equity (ROE) Bank,
    • A ratio that shows how profitable a company is when compared to shareholder equity.
  • Futures Bank,
    • Contracts to buy something in the future at a price agreed upon in advance. They first developed in the agriculture commodity markets but often involve foreign exchange, Eurodollar deposits and government bonds.
  • Asset-Backed Securities (ABS) Acronym, Very Important,
    • Securities backed by a pool of assets.
    Financial security made up of a bundle of assets.
  • Stock Insurance Company Definition,
    • An insurance company with multiple stockholders each owning shares in the corporation.
  • Home Equity (HE) Bank, Very Important,
    • The part of a home's value that the mortgage borrower owns outright; the difference between the fair market value of the home and the principal balances of all mortgage loans.
  • Investments in Affiliates Bank,
    • A situation where an investor has a great deal of control over the operation and/or financial management of his or her investment.
  • Seed Funding Bank,
    • Money used to start a business.
  • Venture Capital (VC) Bank,
    • Financial capital given to startup companies.
  • Investment Canada Act (ICA) Bank Est. 1985, Canada,
    • A Canadian law that gives the government power to deny foreign investments of "significant" size if they fail to provide a "net benefit to Canada."
  • Investment Bank,
    • Something you put your money into in order to make money.
  • Home Equity Loan (HEL) Bank, Very Important,
    • A loan that can replace or be an addition to the first mortgage. Typically used as a home improvement loan.
    Also known as an Equity Take Out (ETO).
  • Mortgage-Backed Securities Definition, Important,
    • Securities backed by mortgage debt.
  • Share Certificate Bank,
    • A certificate of deposit issued by a credit union that pays a specific dividend if held for a specific period. It's the credit union equivalent of a certificate of deposit. A penalty is usually assessed if all or any of the principal is withdrawn before maturity.
  • Preferred Stock Definition,
    • A type of security that signifies part ownership in a corporation and is given preferential treatment over common stocks.
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