ETYM French équité, Latin aequitas, from aequus even, equal. Related to Equal.
1. The difference between the market value of a property and the claims held against it.
2. The ownership interest of shareholders in a corporation.
A shortened term for the American Actors' Equity Association, the labor union for professional actors in the theater.
System of law supplementing the ordinary rules of law where the application of these would operate harshly in a particular case; sometimes it is regarded as an attempt to achieve “natural justice”. So understood, equity appears as an element in most legal systems, and in a number of legal codes judges are instructed to apply both the rules of strict law and the principles of equity in reaching their decisions.
A company's assets, less its liabilities, which are the property of the owner or stockholders. Popularly, equities are stocks and shares which do not pay interest at fixed rates but pay dividends based on the company's performance. The value of equities tends to rise over the long term, but in the short term they are a risk investment because prices can fall as well as rise. Equity is also used to refer to the paid value of mortgaged real property, most commonly a house.
With changes in US tax regulations, from the late 1980s, home-equity loans (second mortgages) have become a very popular financial tool, since the interest is, like mortgage interest, tax deductible.