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Over 700 finance terms, Shmooped to perfection.
Equity can refer to two things:
- The amount of value you have in assets minus any debts. If you have a $200,000 house and owe $100,000 on your mortgage, you have $100,000 in equity. It's an important number if you’re trying to borrow against that amount.
- Ownership (of stock). If you own 3 shares of Acme Corporation, you have equity in the company that made the Road Runner famous. Equity means owning a sliver of the big fat pie called Corporate America.