Equity

1. Law. A legal system that resolves disputes between persons by resort to principles of fairness and justness.

2. The capital of a firm invested by those accepting the greatest degree of risk, for example the holders of ordinary shares (also known as common stock) in a company.

3. Securities representing the rights of the risk capital investors in 2. above.

4. The net value of an asset, after deducting debt relating to it or secured on it.

See also

• Blue chip
• Capital structure
• Common law
• Common stock
• Compound instrument
• Debt
• Dividend growth model
• Entity
• Equity cost of capital
• Equity instrument
• Equity investments
• Kay Review
• Liabilities and equity
• Market/book ratio
• Mezzanine
• Ordinary shares
• Return on equity
• Share
• Shareholders’ funds
• Stock
• Total return swap