equity capital

Definitions

Accounting

  • noun the nominal value of the shares owned by the ordinary shareholders of a company

Economics

  • noun a company’s capital which is invested by holders of ordinary shares giving them the right to unlimited returns. Note that preference shares are not equity capital, since they involve less risk and do not share in the profitability of the company – if the company is wound up none of the equity capital would be distributed to the preference shareholders.
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