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What is an equity stake?

Updated: 9/13/2023
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13y ago

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When a shareholder has an equity stake in an organisation they are able to put pressure on management to invest their money wisely, thus receiving a greater return eventually. This would suggest that they have a high enough proportion of shares to entitle them to be part of decisions in the company.

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Q: What is an equity stake?
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Equity represents owners financial stake in the business. It is normally believed that business belongs to those who have major financial stake. It is also believed that those who are having more financial stake will devote more time in futherence of the business and will be involved in the business. The debt equity ratio is an indicator. It compares the owners' stake to the money borrowed from outsiders.


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Does sweat equity means you are a partner in the company?

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Private Equity?

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