Equity, in the context of finance and accounting, refers to the ownership interest of shareholders in a company. It represents the residual value of a company’s assets after all liabilities have been paid. In other words, equity is the value that would be left over if a company were to sell all of its assets and pay off all of its debts. Equity can be represented in the form of common stock, preferred stock, or retained earnings. It is a crucial element of a company’s balance sheet and reflects the overall financial health of the company.
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