The glossary

Equity

Equity – or stock – represents a fraction of a company. Shares are the unit in which these fractions are measured. Shares are sold during private sales or generally traded on stock exchanges if the company is listed (also called public). A company usually sells its shares for money to operate its business. Stocks often pay dividends (parts of their profits) to investors, and sometimes give them rights to vote in shareholder meetings (common stock).