Equity Ownership

Equity means an ownership stake in an investment expressed as a fraction of the total ownership. For example, if a business has 10 ownership shares total and you buy one, your equity in the business is 10 percent. In a public corporation, equity owners – that is, stockholders – get to share the profits of the business. A business can pay its profits to the equity stockholders as dividends, or it can keep the profits to grow bigger, trying to make each share of stock worth more.