Difference between Stocks, Shares and Equity

More details: http://techcorpgroup.com/Dev_Academy/difference-equity-stocks-shares/ Shares: No. of units into which capital of company is divided. Example: I…
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3 thoughts on “Difference between Stocks, Shares and Equity

  1. B. K. Hutterer

    That is misleading, simply because shares and stocks basically mean the
    same thing, especially in the case of a shareholder/stockholder in
    accountant-speak. That is what I learned in the Fundamental Accounting
    Principles course. Equity is what you own. For example, you buy a house,
    but before you do, you get a mortgage agreement (a loan, simply put) where
    they cover 85% of the cost of purchase and you cover the remaining 15%
    through an RHOSP); the 15% is your equity on the house you have just
    purchased. As you pay down the mortgage on your home, so rises your equity
    on the home once you have finally paid off the interests and are now paying
    down the principle mortgage amount until it reaches zero. Once it reaches
    zero, then you have 100% equity on the home. Thus you own the home
    outright instead of the bank.

    With just straight investing in common shares/stocks, you are buying a part
    of a company where you may get however many shares for the amount of money
    you invest. That money can be represented simply as a percentage of
    ownership in a company. That percentage is your equity in the company.
    Thus, it can be concluded that equity and ownership mean the same thing.
    However, in this light, you are not concerned with debt when investing in
    a company because you are not taking out a loan to invest (if you are
    taking out a loan to “play” the stock market, you are a fool).

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