• Represents ownership interest in a firm. Also the residual dollar value of a futures trading account, assuming its liquidation at the going market price.

• Ownership of stocks or real estate.

• See Shareholders' Equity


Follow this link for all the terms related to equity.

 Embedded terms in definition
Real estate
Shareholders' equity
 Referenced Terms
 Adjusted present value: Abbreviated APV. The net present value analysis of an asset if financed solely by Equity (present value of un-levered cash flows), plus the present value of any financing decisions (levered cashflows). In other words, the various tax shields provided by the deductibility of interest and the benefits of other investment tax credits are calculated separately. This analysis is often used for highly leveragedtransactions such as a leverage buy-out.

 Asset based financing: Methods of financing in which lenders and Equity investors look principally to the cash flow from a particular asset or set of assets for a return on, and the return of, their financing.

 Asset/equity ratio: The ratio of total assets to stockholder Equity.

 Assets to equity: The ratio of assets to Equity in the company; a measure of leverage, which has a bearing on the Profitability of the firm.

 Attribute bias: The tendency of stocks preferred by the dividend discount model to share certain Equity attributes such as low price-earnings ratios, high dividend yield, high book-value ratio or membership in a particular industry sector.

 Related Terms

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