what is stock market

Equity

watch this video to understand how to work equity market.

simply, equity is ownership.


In the trading world, equity refers to STOCK In the accounting and corporate lending world, equity (o
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.
In the real estate world, equity refers to the difference between an asset"s  market value and the debt owed on the asset.

HOW IT WORKS (EXAMPLE)

The two most common types of equites   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  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 and additional paid in capital and any and any earnings retained by the company.