Definition of Equity capital:
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 companys 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.
How to use Equity capital in a sentence?
- When the biotech company announced that the FDA had failed to approve the companys new drug, the equity capital owners of the company lost money when the companys stock price dropped.
- The equity capital was a pleasant surprise to the analysts who were searching for funds that could potentially boost their projects likely success chances.
- If you want to figure out all of your finances then you must calculate how much you have in your current equity capital .
Meaning of Equity capital & Equity capital Definition