Glossary

Equity

In accounting terms, equity is the total assets minus all liabilities. If liability exceeds assets, negative equity exists.

In investment terms, equity investments refer to the buying and holding of shares, or stock, on a stock market. You tend to invest in equities in the hope of income from dividends and capital gains. Equity holders are granted voting rights, giving them a say in major transactions affecting the business, and therefore their investment, however they tend to be the lowest priority in terms of recovering their investment should the company go under. See also Private Equity