equity capital

  

Definition

Invested money that, in contrast to debt capital, is not repaid to the investors in the normal course of business. It represents the risk capital staked by the owners through purchase of a company's common stock (ordinary shares).

The value of equity capital is computed by estimating the current market value of everything owned by the company from which the total of all liabilities is subtracted. On the balance sheet of the company, equity capital is listed as stockholders' equity or owners' equity. Also called equity financing or share capital.


Use equity capital in a sentence

  • If you want to figure out all of your finances then you must calculate how much you have in your current equity capital.

    6 people found this helpful    
  • The equity capital was a pleasant surprise to the analysts who were searching for funds that could potentially boost their projects likely success chances.

    9 people found this helpful    
  • When the biotech company announced that the FDA had failed to approve the company's new drug, the equity capital owners of the company lost money when the company's stock price dropped.

    7 people found this helpful    
Show more usage examples...

Related Videos




http://www.businessdictionary.com/definition/equity-capital.html

Mentioned in these terms

Have a question about equity capital? Ask for help in the
Community
Browse by Letter: # A B C D E F G H I J K L M N O P Q R S T U V W X Y Z