Definition of equity

What a shareholder owns in a corporation, entitling him/her to part of that entity's profits (in the form of dividends) and a measure of control (through shareholder voting rights).

The total capital in a company owned by shareholders is called shareholder's equity or equity capital (in essence, assets minus liabilities such as debt and other obligations to non-shareholders). If liabilities exceed assets on the balance sheet, then a company is said to have negative equity.

The markets where equity (stocks/shares are also called equities) is traded are called the equity markets (the same as stock markets).

Equity is also the market value of a property after deducting unpaid mortgage. In this case, negative equity occurs when the property is worth less than the debt on it.