Equity

Equity represents the value of the shares issued by a company, signifying an ownership interest in a corporation. For publicly traded companies, equity is easily determined by market capitalization, while for private companies, its value is established through fundraising rounds and valuations. Founders, employees, and investors hold equity in a company, with their ownership stake typically proportional to the number of shares they own. This ownership grants them certain rights, such as voting power, a claim on company assets, and a share of profits, though these vary between common and preferred stock.