Questions tagged [equity]

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What is this type of equity called where I get a share of the profits for the duration of my employment?

I've heard of an interesting "equity" scheme in a company from my friends and I'm wondering what this scheme is called. You work as the Manager for a supermarket chain, and they will give ...
John Hon's user avatar
  • 371
1 vote
0 answers
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Under what conditions can a stock grant agreement be issued?

Several years ago, I did work for a company (Delaware corporation). In return, I was issued some stock in exchange for handing over my IP rights. Here's the relevant excerpt from the contract I signed:...
Foobar's user avatar
  • 111
7 votes
7 answers
3k views

I can't understand what equity is

I know there is dozen materials out there on the internet, but I can't wrap my head around equity. From the accounting equation I know that assets = liabilities + equity. assets are the things the ...
Yurii A's user avatar
  • 179
2 votes
1 answer
103 views

How does an equity partnership relate to company's valuation?

I was recently made a partner in the firm that I work in. I received 15K shares at a face value of $0. I was told that a vesting would occur after 5 years where the anticipated vesting price would be $...
Megatron's user avatar
0 votes
1 answer
46 views

References/terms to search for regarding financial instrument universe selection

When attempting to profit off of the market in one way or another, an entity, be it a fund, individual investor, institution, etc., must first decide on what actual financial instruments are to be ...
QMath's user avatar
  • 103
3 votes
1 answer
366 views

Explaining equity being analogous to a call option and bonds being equivalent to a short put

I read this: Equity in a corporation is essentially a call option on the enterprise value (the sum of all the firm’s assets) with a strike price equal to the firm’s debt. The firm’s bonds are a risk-...
MegaZeroX's user avatar
  • 143
0 votes
2 answers
280 views

Are there any amortized home mortgage loans where the monthly payments are distributed equally between interest and principal?

Are there any type of home mortgage loans where the amortized monthly payments are equally distributed towards the interest and principal? I understand this would violate the current formulas used to ...
Ali Vand's user avatar
-5 votes
3 answers
241 views

Why aren’t amortized loans outlawed and replaced with a more equitable model to the borrower?

I completely understand that banks are in the business of making money and capitalism prioritizes profit above all other values. However why aren’t laws enacted that would ban amortized loans and ...
Ali Vand's user avatar
0 votes
1 answer
50 views

How do I know if selling equity is better or not in this problem?

In this exemplar situation, how do I know if selling my equity is better nor? Situation: I have a small business which I am a 50% owner of. The business is currently worth $6,000,000 and is making $...
daf8u3fk's user avatar
0 votes
1 answer
160 views

How is fundamental analysis done on index funds?

What are the sorts of fundamental analysis done at the index level? What methods & metrics are used for determining the under/overvaluation of something like the S&P 500 index fund? Do large ...
David's user avatar
  • 191
1 vote
1 answer
74 views

Are assets held under brokerage at risk of a bank's bankruptcy proceedings?

I know that the FDIC guarantees cash deposits up to a maximum of 250K, but what happens to assets held in a bank's brokerage arm? For instance, if someone has 10,000 shares of MSFT deposited in a bank ...
AlanSTACK's user avatar
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-2 votes
1 answer
93 views

Convert index to percentage

How would you convert the equity premium risk to percentage found here: https://www.spglobal.com/spdji/en/indices/strategy/sp-us-equity-risk-premium-index/#overview
KMN's user avatar
  • 101
1 vote
2 answers
92 views

actively discussed ETFs

I have noticed that sometimes some news resource will publish an article about a particular ETF, it gets attention and a lot of other news resources will publish the same article. Does it attract the ...
Medan's user avatar
  • 543
2 votes
1 answer
101 views

What is the difference between preferred stock and a perpetuity bond?

I have some problems with understanding a preferred stock and a perpetuity bond. Both have a fixed interest rate and both will never actually repay the notional amount. The only difference, is that ...
Snowflake's user avatar
  • 133
1 vote
3 answers
101 views

The cost of capital Equity versus Debt

Trying to understand something basic about cost of capital that I can't seem to wrap my head around. When we talking about issuing debt to raise funds for a project, the cost of capital is the ...
Paolo Menuez's user avatar
0 votes
3 answers
215 views

How to split equity fairly when contributions differ?

I understand there are a few similar questions here but for this I'm going purely by numbers for a fair equity split of residential property. I've rounded the numbers for ease. I'm interested in ...
NotLeonhard's user avatar
2 votes
3 answers
211 views

If total assets less total liabilities is positive, how should negative shareholders' equity be interpreted?

For some recently public companies, total assets minus total liabilities is a positive number, but shareholders' equity is negative. In some cases, this appears to be the result of a past sale of ...
SapereAude's user avatar
0 votes
2 answers
140 views

Why is CAPM limited to a 'single period'?

CAPM (capital asset pricing model) has a 'single period' limitation. What does it mean practically? The CAPM is based on a number of assumptions: • well-diversified investors • perfect capital market •...
user3156459's user avatar
1 vote
2 answers
813 views

Can I get my home reappraised to eliminate PMI payments earlier?

I recently bought a home and have paid off 7% of the original loan. Because I bought the house slightly under market value (due to some damage that I've since repaired) and a sharp increase in the ...
Snowman8734's user avatar
-1 votes
2 answers
72 views

How does one use EPS as a valuable tool in evaluating an equity?

EPS (Earnings Per Share) is typically listed along with what seems to be much more insightful metrics for equities. Is EPS useful in it's own right, or does one need to plug it in to an equation to ...
End Anti-Semitic Hate's user avatar
1 vote
2 answers
514 views

Can a tenant build equity in property they are renting?

A tenant rents commercial property and invests substantial capital to renovate and improve the space in order to run a business. Does the renter's investment entitle them to equity or a percentage of ...
stateazure's user avatar
0 votes
0 answers
114 views

How to evaluate equity requirement for a stealth startup?

I was asked for salary expectations at a stealth startup. How to go about deciding on the amount of equity when there is no information on their numbers (sales, valuation, etc.) online?
rahs's user avatar
  • 353
22 votes
7 answers
4k views

Losing equity if my work is used for a new company

Say there is a small company (C1) that gives me 0.1% equity for building their website since they did not want to pay cash. Now the founders of C1 stop working on C1 , create a new company C2 and use ...
rahs's user avatar
  • 353
-1 votes
2 answers
207 views

Do estates have to sell equity in a responsible manner?

For example, the Bill Gates foundation owns 11 odd million shares in Walmart. If Bill's passing would require the foundation's assets to be liquidated, how would that happen? I'm assuming a sudden ...
Neil Meyer's user avatar
2 votes
1 answer
3k views

Splitting equity among domestic partners when one partner pays the full downpayment

My partner and I are looking to buy a home together in California and set up a contract for splitting the equity. I would pay the 20% downpayment on my own, and thereafter my partner and I would split ...
S L's user avatar
  • 23
0 votes
0 answers
44 views

What financial return do investors get when they buy shares in a company besides dividends, value of assets, and gains from changes in stock price? [duplicate]

I'm confused why a shareholder would purchase shares in a stock that doesn't pay dividends. They don't get part of the profits: Without dividends, when the company earns profits, the shareholder ...
Stan Shunpike's user avatar
14 votes
7 answers
6k views

Why would you let your mortgage default if you can afford to keep paying it?

I was reading this Wikipedia article about the subprime mortgage crisis, where it says the following (emphasis mine): By September 2008, average U.S. housing prices had declined by over 20% from ...
Enduring Lobster's user avatar
0 votes
1 answer
126 views

Accelerated Incentive Units or Profit Shares' pros and cons

I'm new to fundamentals of stock/equity. I have got an offer from an LLC company and the recruiter is saying they will allocate me Accelerated Incentive Units(AIU) which is intended to be treated as ...
Learner's user avatar
  • 101
4 votes
6 answers
3k views

Options for building equity while living with parent?

My wife and I recently moved to an expensive area of the US for her job, the school district and other reasons. We are currently living with my wife's mother, in her house. After a recent divorce she ...
Raketenolli's user avatar
2 votes
3 answers
326 views

Equity split between join home owners [duplicate]

My sister & I bought a home 50/50 We are on the deed jointly, and we have no written agreement other than the closing documents. She paid for her half of the mortgage for 2 years, then paid ...
Teri Powell's user avatar
0 votes
1 answer
107 views

Does it often make sense to sell an equity while it still is a short-term loss?

Let's imagine Juanita. Juanita pays taxes in the USA. Juanita bought equity XYZ on January 1 and sold it for a profit of $100 a month later. Thus, it was short-term gain. Juanita also bought equity ...
Definitely Not Juanita's user avatar
1 vote
0 answers
31 views

Need of Equity share capital if one has sufficient reserves and surplus?

New to stock market correct me if i'm wrong. Reliance Industries balance sheet According to my understanding reserves and surplus keep account for profit that a company makes and this money is ...
Mohit's user avatar
  • 11
1 vote
1 answer
120 views

Should a person sell all/some/none of the stock they receive when their former employer goes public

Consider a person with the following financial situation: An annual income in the 150-250 thousand $/year range Savings in the 250-750 thousand $ range (invested in Vanguard ETFs, for example) A ...
Adrian's user avatar
  • 113
18 votes
3 answers
5k views

Why would one choose to sell stock back to a company for less than their current market price?

Marathon Petroleum Corporation (MPC) is currently offering to buy back $4 billion USD of their stock (reference). The minimum they will pay is $56, and the maximum is $63. Given that this equity is ...
user109880's user avatar
4 votes
2 answers
293 views

How are assets stripped before bankruptcy? [closed]

This New Yorker article says ...hedge funds and private equity have used leveraged buyouts to purchase chains like Sears and Toys R Us, and then stripped their assets, including real estate, en route ...
have you seen this channel's user avatar
1 vote
1 answer
94 views

Investment with Valuation and Credit Line with 10% Equity

Before I ask my question, I would like to tell that I am not from a Business background and therefore this might sound like a stupid question to most. Recently, I watched a film based on Steve Jobs ...
Abdul Jabbar's user avatar
0 votes
3 answers
176 views

How do SPAC targets (acquired companies) benefit from additional cash upon merging with a SPAC?

Hope this is the right place for the question. There are many articles on SPACs explaining how things work, so I'll cut straight to the question: I have read and heard people say that a SPAC deal can ...
Jean Monet's user avatar
0 votes
2 answers
49 views

How company total asset increased while net revenue and EPS is negative

How company total asset increased while net revenue and EPS is negative? I looked at one company, and its yearly total asset is increasing year by year. However, its net revenue and EPS still negative....
Aljaber's user avatar
1 vote
1 answer
320 views

Why do startups prefer Stock Options over Stock Grants?

Why do startup companies and large companies alike seem to always prefer to offer their employees stock options, rather than stock grants? Stock grants seem like a way better deal for employees. Let ...
Paul Fidika's user avatar
10 votes
6 answers
2k views

How to structure equity buyout?

Years ago, I helped out a friend on his startup as a software engineer. Spent ~500-600 hours on it, was compensated a little under half my hourly rate + 4.5% equity in the company, because the company ...
Pete Jones's user avatar
0 votes
1 answer
96 views

How to get UK company share certificates when an entrepreneur does not comply?

In January 2020, I made an investment of £7,500 being promised that I would receive the respective share certificates related to UK company. After that, the pandemic became the excuse but the ...
Fabio Milheiro's user avatar
3 votes
2 answers
960 views

In the context of corporate profits, what does "back-half" mean?

Today, the following was reported: Clorox shares are trading lower after the company reported Q2 results. While the company beat estimates, it said it expects back-half sales to be about flat. What ...
End Anti-Semitic Hate's user avatar
1 vote
3 answers
220 views

How do I calculate the equity I have in my home when overpaying on mortgage?

I am aware that when paying off a repayment mortgage the proportion of monthly payments going towards the interest is higher towards the start and eventually the proportion lowers towards the end of ...
Jsk's user avatar
  • 1,668
1 vote
1 answer
161 views

Assets != Equity + Liabilities

could anyone explain to me, in this balance sheet, which items are assets, which items are liability, and which items are equity? Are funding debt and Notes issued liability? Is redeemable convertible ...
Jerry Zhang's user avatar
0 votes
1 answer
69 views

How equity works - is there a difference between rescaling equity and fixed-equity?

after a colleague of mine left the company, I'd like to provide him/er with an equity for the work done. I'd like this equity to be dynamic, meaning that whenever a new member or investor enters, his/...
TakeMeToTheMoon's user avatar
1 vote
2 answers
222 views

To the employer, is equity more or less expensive than payroll?

I work for a company that compensates employees with low base salary and a bit higher than average equity. My question is, how much more expensive is paying an employee equity vs standard salary? How ...
Pants's user avatar
  • 111
0 votes
1 answer
88 views

Equity Crowdfunding payoff

I have invested in several companies so far through equity crowdfunding rules (on sites like seedinvest and wefunder), but I'm still not totally clear on how future equity might be allocated. Does ...
JQTaylor's user avatar
1 vote
2 answers
64 views

What to ask for to determine percent of startup I have shares in?

I work at a pre-launch tech startup and we agreed that I'd receive 2% equity. When I signed paperwork for the shares, there was nothing indicating what % I signed at, just the number of shares. I ...
user5854648's user avatar
15 votes
7 answers
4k views

Why would a company prevent their employees from selling their pre-IPO equity?

I have heard and read that some non-publicly traded companies prevent their employees from selling their pre-IPO equity. Why would they have such a policy? For example, from How to Sell Private ...
Franck Dernoncourt's user avatar
1 vote
4 answers
490 views

How to reinvest my gains in the equity?

My equity portfolio has been gaining a bit of traction because the economy is recovering. I am a noob investor and It has only been a few months since I first started. The rule of thumb for most ...
Devarshi Goswami's user avatar