Questions tagged [equity]
The equity tag has no usage guidance.
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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 ...
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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-...
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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 ...
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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 ...
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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 $...
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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 ...
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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 ...
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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
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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 ...
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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 ...
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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 ...
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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 ...
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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 ...
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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
•...
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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 ...
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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 ...
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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 ...
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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?
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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 ...
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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 ...
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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 ...
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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 ...
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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 ...
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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 ...
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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 ...
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256
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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 ...
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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 ...
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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 ...
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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 ...
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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 ...
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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 ...
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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 ...
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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 ...
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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....
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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 ...
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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 ...
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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 ...
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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 ...
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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 ...
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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 ...
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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/...
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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 ...
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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 ...
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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 ...
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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 ...
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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 ...
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What does equity mean for me in practical terms in a job offer?
I am looking at a job offer and they are offering me the following equity package:
Equity: 14,000 stock options
Equity Breakdown: All equity goes on a 4 year vesting schedule, with a
1 year cliff. ...
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Why would voting Class A Google stock (GOOGL) be selling for less than non-voting Class C stock (GOOG)?
Currently (2020 October 30), Class A Google stock (GOOGL), which has voting rights, is selling for less than its non-voting Class C stock (GOOG).
This seems backwards.
Why would this ever be the case?
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Were the shareholders of ZTNO (Zoom Technologies Inc.) just hustled?
According to most financial sites, shares of Zoom Technologies Inc. (ZTNO) just suddenly went to zero.
Before anyone panics, I'm not referring to Zoom Video Communications Inc. (ZM), the maker of the ...
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Making equity investment of personal money to LLC
NY state here. I have a very small single member, member managed (I'm the member) LLC that has elected to be taxed as an S-corporation (this might be important).
The LLC is running a little light on ...
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