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equity

 

Finance and accounting concept. Equity represents any of three separate but related values: the money value of a property or of an interest in a property in excess of claims or liens against it; a risk interest or ownership right in property; and the common stock of a corporation. In corporate finance, a basic equation holds that a company's total assets minus total liabilities equals total owners' equity.

For more information on equity, visit Britannica.com.

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Banking Dictionary: Equity
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1. Value of stockholders' ownership interest in a corporation after all claims have been paid, and thus a claim on its assets in proportion to the number, and class, of shares owned. Equity, also called net value or net worth, is total assets less total liabilities. Common stock equity of a bank is counted as part of its Risk-Based Capital.

2. Fairness in settling legal disputes, as opposed to a strict interpretation of common law rules.

3. Residual value of a brokerage or futures margin account, assuming its liquidation at the current market prices.

4. Credit union member's ownership interest, represented by a Share Account.

5. Market value of real property, less any outstanding mortgages.

The interest or value that the owner has in real estate over and above the Liens against it.
Example: A property has a Market Value of $100,000. The owner currently owes $60,000 in Mortgage loans that are against the property. The owner's equity is $40,000. See Table 21.

Antonyms: equity
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n

Definition: money
Antonyms: balance


In real estate, the financial value of someone's property over and above the amount the person owes on mortgages. For example, if you buy a house for $100,000, paying $20,000 down and borrowing $80,000, your equity in the house is $20,000. As you pay off the principal of the loan, your equity will rise.

Wikipedia: Equity (economics)
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Equity is the concept or idea of fairness in economics, particularly as to taxation or welfare economics.

Contents

Overview

In welfare economics, equity may be distinguished from economic efficiency in overall evaluation of social welfare. Although 'equity' has broader uses, it may be posed as a counterpart to economic inequality in yielding a "good" distribution of welfare. It has been studied in experimental economics as inequity aversion.

In public finance horizontal equity is the idea that people with a similar ability to pay taxes should pay the same or similar amounts. It is related to the concept of tax neutrality or the idea that the tax system should not discriminate between similar things or people, or unduly distort behavior.[1].

Vertical equity usually refers to the idea that people with a greater ability to pay taxes should pay more. However, to those that believe in a flat tax, the idea of vertical equity could mean that the rich should not be punished for their success by paying higher taxes than others. If the rich pay more in proportion to their income, this is known as a proportional tax; if they pay an increasing proportion, this is termed a progressive tax, more associated with redistribution of wealth.[2]

In a Health Care Context

Horizontal equity means providing equal healthcare to those who are the same in a relevant respect (such as having the same 'need'). Vertical equity means treating differently those who are different in relevant respects (such as having different 'need'), (Culyer, 1995).

Health studies of equity seek to identify whether particular social groups receive systematically different levels of care than do other groups. There are many ways to identify preventable or unjust disparities, including the study of health outcomes using quintile analysis or concentration indexes.

In fair division

Equitability in fair division means that every person’s subjective valuation of their own share of some goods is the same. The surplus procedure (SP) achieves a more complex variant called proportional equitability. For more than 2 people a division cannot always both be equitable and envy-free.[3]

Notes

  1. ^ Musgrave (1987), pp. 1057-58.
  2. ^ Musgrave (1959), p. 20.
  3. ^ Better Ways to Cut a Cake by Steven J. Brams, Michael A. Jones, and Christian Klamler in the Notices of the American Mathematical Society December 2006.

References

See also


 
 
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Britannica Concise Encyclopedia. Britannica Concise Encyclopedia. © 2006 Encyclopædia Britannica, Inc. All rights reserved.  Read more
Banking Dictionary. Dictionary of Banking Terms. Copyright © 2006 by Barron's Educational Series, Inc. All rights reserved.  Read more
Real Estate Dictionary. Dictionary of Real Estate Terms. Copyright © 2004 by Barron's Educational Series, Inc. All rights reserved.  Read more
Answers Corporation Antonyms. © 1999-2009 by Answers Corporation. All rights reserved.  Read more
Economics Dictionary. The New Dictionary of Cultural Literacy, Third Edition Edited by E.D. Hirsch, Jr., Joseph F. Kett, and James Trefil. Copyright © 2002 by Houghton Mifflin Company. Published by Houghton Mifflin. All rights reserved.  Read more
Wikipedia. This article is licensed under the Creative Commons Attribution/Share-Alike License. It uses material from the Wikipedia article "Equity (economics)" Read more