Examples of equity in a Sentence
In making these decisions we should be governed by the principle of equity.
We've been slowly paying off our mortgage and building up equity in our house.
Recent Examples of equity from the Web
Chinese equities have plunged into bear-market territory.
Avolon was set up only five years earlier with private equity backing.
Taking away that guidance undermines the steps toward equity school communities have long been taking.
This has made some early employees unhappy, according to The Information, and if the company doesn’t go public by the end of 2020, some employee equity grants will expire.
God’ are in the same category, our work toward equity will not just be incomplete.
Evo takes equity but does not give cash, while Ad Astra provides a cash investment in a convertible note, as well as taking 5 percent equity in the company.
Even easier than a fire sale of the car and house, a fresh loan against the home equity would ease the situation.
And one of the rules of AMP is equity, so all the companies donate the same amount.
These example sentences are selected automatically from various online news sources to reflect current usage of the word 'equity.' Views expressed in the examples do not represent the opinion of Merriam-Webster or its editors. Send us feedback.
Financial Definition of EQUITY
What It Is
Put simply, equity is ownership.
In the trading world, equity refers to stock. In the accounting and corporate lending world, equity (or more commonly, shareholders’ equity) refers to the amount of capital contributed by the owners or the difference between a company’s total assets and its total liabilities.
How It Works
The two most common types of equities traders encounter are common stock and preferred stock. Share certificates bearing the name of the shareholder, the number of shares, and the name of the company represent these equities, or shares. The number of shares a corporation is authorized to issue is outlined in its corporate charter. When a company decides to sell additional shares to new or existing shareholders, this is sometimes called raising equity.
Although shareholder rights vary by company, one of the most prominent characteristics of equity is that it entitles the owner to vote on certain matters and to do so in proportion to the number of shares he or she owns. The company’s articles of incorporation and bylaws determine the number of votes each share is entitled to.
As you can see in the sample balance sheet for XYZ Company, equity is generally broken out into the par value of the shares outstanding, any additional paid in capital, and any earnings retained by the company.
Why It Matters
Equity holders enjoy voting rights and other privileges that only come with ownership, because equity represents a claim on a proportionate share of a company’s assets and earnings. These claims are generally subordinate to lenders’ claims, but only equity holders can truly participate in and benefit from growth in the value of the enterprise.
Some financial instruments have equity characteristics but are not actually equity. Convertible debt instruments, for example, represent loans that convert into shares when a company (the borrower) crosses certain thresholds, thereby turning a lender into an owner in certain events. Stock options also act like equity in that their value changes with the value of the underlying shares, but the option holders generally do not have voting rights and are not eligible to receive the dividends or other distributions made to bona fide equity holders.
EQUITY Defined for English Language Learners
Definition of equity for English Language Learners
: fairness or justice in the way people are treated
finance : the value of a piece of property (such as a house) after any debts that remain to be paid for it (such as the amount of a mortgage) have been subtracted
: a share in a company : a share of a company's stock
legal Definition of equity
- prompted by considerations of equity
- comity between nations, and equity require it to be paid for
- —F. A. Magruder
- the inequities produced by the system are outnumbered by the equities
- the judicial power shall extend to all cases, in law and equity, arising under this Constitution
- —U.S. Constitution art. III
- equity treats a devisee who procures a will by fraud as a constructive trustee
- —W. M. McGovern, Jr. et al.
- sat alone for some time in equity
- —O. W. Holmes, Jr.
Origin and Etymology of equity
Seen and Heard
What made you want to look up equity? Please tell us where you read or heard it (including the quote, if possible).