EQUITY CAPITAL Meaning and
Definition
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Equity capital refers to the funds that are invested in a company or business in exchange for ownership, represented by shares or stock. It is a long-term source of finance that provides financial backing to a company and represents the residual value of the company's assets, after all debts and liabilities have been paid off.
Equity capital is commonly raised by issuing shares to investors, who become shareholders or equity holders of the company. These shareholders then have the right to participate in the company's profits and decision-making process, typically by voting at general meetings. The amount of equity capital invested by each shareholder determines their ownership stake or equity stake in the company. Shareholders may receive dividends as a return on their investment, proportionate to their shareholding.
Equity capital serves as a means of raising funds for business expansion, acquisition of assets, research and development, or other strategic initiatives. Unlike debt capital, which requires repayments with interest, equity capital does not create any obligation for the company to make immediate repayments. However, it does expose the company to the risk of dilution of ownership, as new shares may be issued to raise additional equity capital in the future.
Overall, equity capital provides the necessary financial resources for a company's growth and development while allowing investors to benefit from potential increases in the value of their shares.
Common Misspellings for EQUITY CAPITAL
- wquity capital
- squity capital
- dquity capital
- rquity capital
- 4quity capital
- 3quity capital
- e1uity capital
- e2uity capital
- ewuity capital
- eauity capital
- eqyity capital
- eqhity capital
- eqjity capital
- eqiity capital
- eq8ity capital
- eq7ity capital
- equuty capital
- equjty capital
- equkty capital
- equoty capital
Etymology of EQUITY CAPITAL
The word "equity" comes from the Latin word "aequitas", meaning fairness or equality. It is derived from the adjective "aequus", which means equal or just. "Capital", on the other hand, comes from the Latin word "capitālis", which pertains to the head or the topmost (capita in Latin). In early Roman times, "capitalis" was used to refer to funds or property of importance. Hence, the combination of these two words in "equity capital" refers to the ownership interest in a company that is represented by shares of common stock.
Similar spelling word for EQUITY CAPITAL
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