YOU ASK:
What is the definition of Equity?
WE ANSWER:
Equity refers to the amount or percentage in ownership held by shareholders.
The term "equity" is used in several ways:
- For homeowners, home equity refers to the difference between the house's fair market value (or the value that the house will fetch currently) and the mortgage balance that still remains unpaid. In short, home equity is what the homeowner actually "owns" with regards to a certain property.
- In corporations, equity is used to refer to ownership in a stock. It is the remaining interest after all liabilities have been deducted. The remaining amount is spread among individual shareholders of the stock (be they preferred or common stock).
- For private equity, this means that the stock being referred to is for a privately held company.
Was this insurance question and its answer useful?
| Not a bit | Very useful |
Have an Insurance Question? Ask For Insurance
More insurance terms around equity:
- Equity Indexed Annuity
- Errors and Omissions Coverage (E&O)
- Escrow Account
- Excess and Surplus Lines
- Excess of Loss Reinsurance
- Exclusion
- Exclusive Agent
- Exclusive Remedy
- Expense Ratio
- Experience
- Environmental Impairment Liability Coverage
- Endowment Insurance
- Endorsement
- Employment Practices Liability Coverage
- Employer’s Liability
- Employee Retirement Income Security Act (ERISA)
- Employee Dishonesty Coverage
- Elimination Period
- Electronic Commerce / E-Commerce
- Economic Loss