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Information > Financial Terms > This page Equity This
term has three meanings: 1.
In Anglo-American legal parlance, the administration of justice,
not through the inflexible procedures of the law courts, but
through the principles of equitable justice developed by Chancery.
Thus there are Courts of Law and Courts of Equity and it is possible
to bring an action and obtain specific performance or other
special relief through a Court of Equity when an adequate
remedy is not available in a Court of Law. 2.
In accounting and finance, net ownership, i.e., the extent of the
owner's right in property above all claims and liens against
it expressed in money value. Thus
the equity of the stockholders in a railroad corporation is
represented by the value of the bond and note holders, secure
and unsecured, and all current indebtedness. 3.
In margin buying, the customer's equity is the present market value
of his securities less the debit balance in his account, i.e.,
the sum borrowed from the broker to enable the customer to
make the purchase. |