By Leanna Kelly When you buy stock in a company, you’re buying an equity stake. But what does owner’s equity represent? In terms of stock ownership, equity represents the amount of money owed to a company’s shareholders after asset liquidation and debt payoffs. It’s your ownership of a portion of the total worth and value of the company. The fundamental nature of equity is part ownership of the company’s assets.
Shareholder equity is a term specific to stock in publicly traded companies. When referring to privately held companies, the term is owner’s equity. In either case, the meaning is the same: rights to …read more
