Equity
An ownership stake in a company. Shareholders have a claim on profits and assets after every creditor has been paid, which is why equity is riskier than the same company's debt.
Also called equities · shares · stock
An ownership stake in a company. Shareholders have a claim on profits and assets after every creditor has been paid, which is why equity is riskier than the same company's debt.
Why it matters
Being last in line is the reason equities have historically returned more than bonds, and the reason they can go to zero.
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