Answer / varun vohra

There are two ways for companies to raise money for
business investment - they can borrow it and/or they can
issue shares - otherwise known as stocks. In corporate-
finance-speak, stocks are called equity capital and
borrowed money is debt capital. Equity (stocks/shares)
differs fundamentally from debt in two ways.

It represents an ownership interest in a company - you're
buying a share of the company, not lending the company
money.
A bondholder (basically, a lender) is entitled to a regular
interest payment and can call for a winding up of the
company if interest isn't paid. An equity holder is not
entitled to any regular payment - (although most stocks
provide for the payment of a cash dividend this is at the
discretion of the company's management).
So, buy a stock and you're buying part-ownership of a
company. And as an owner, you take a share in the company's
future profits.

Answer / vandana gupta

The term's meaning depends very much on the context. In
finance, in general, you can think of equity as ownership
in any asset after all debts associated with that asset are
paid off. For example, a car or house with no outstanding
debt is considered the owner's equity because he or she can
readily sell the item for cash. Stocks are equity because
they represent ownership in a company.

Answer / guest

equity means owners share in the business.

Answer / shivakumar

equity is owners total share in the business or company

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