Questions tagged [equity]

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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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0 votes
3 answers
155 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 ...
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2 votes
3 answers
100 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 ...
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0 votes
2 answers
67 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 •...
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1 vote
2 answers
112 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 ...
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0 votes
2 answers
54 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 ...
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1 vote
2 answers
235 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 ...
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0 votes
0 answers
86 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?
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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 ...
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-1 votes
2 answers
201 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 ...
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1 vote
1 answer
239 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 ...
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0 answers
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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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0 answers
25 views

How does Etoro calculate Total Debt to Equity ratio?

I am trying to understand the Balance Sheet report in Stats page that show on each company listed in Etoro. I understand that the formula for Debt to Equity ratio is just that : Debt/Equity and maybe ...
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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 ...
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0 votes
1 answer
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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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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 ...
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2 votes
3 answers
223 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 ...
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0 votes
1 answer
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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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1 vote
0 answers
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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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1 vote
1 answer
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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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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 ...
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4 votes
2 answers
275 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 ...
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1 vote
1 answer
60 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 ...
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0 votes
3 answers
137 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 ...
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0 votes
2 answers
38 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....
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1 vote
1 answer
198 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 ...
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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 ...
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0 votes
1 answer
92 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 ...
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2 votes
2 answers
474 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 ...
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1 vote
3 answers
170 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 ...
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1 vote
1 answer
131 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 ...
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0 votes
1 answer
65 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/...
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0 votes
2 answers
153 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 ...
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0 votes
1 answer
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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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1 vote
2 answers
57 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 ...
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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 ...
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1 vote
4 answers
357 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 ...
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3 votes
2 answers
228 views

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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3 votes
3 answers
1k views

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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1 vote
0 answers
383 views

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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2 votes
1 answer
69 views

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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0 votes
1 answer
55 views

liquidation preference and other loop holes when joining startups who offer equity

There are lots of startups that want to provide equity in exchange for labor rather than a salary or a combination of both. Reading online it seems there are a ton of loopholes where I may not get ...
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1 vote
1 answer
686 views

Difference between Stockholders' Equity and Stockholders' Equity-Parent?

What's the difference between "Stockholders' Equity" and "Stockholders' Equity - Parent"? Which should I use in calculating the return on equity?
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0 votes
1 answer
37 views

NASDAQ Equity Option settlement

Suppose in NASDAQ i sell APPL equity put option of week and that option became ITM then would this option will settle in cash or physical delivery of stock?
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0 votes
1 answer
224 views

Why do startups dilute their equity?

I am trying to understand why, when a startup raises funds, it dilutes its equity by issuing more shares, rather than just issuing a portion of the existing shares. For example, let's say a startup ...
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1 vote
0 answers
72 views

How does a stock trade at an exchange that isn’t where it is listed? [duplicate]

For example, AAPL is listed on NASDAQ but I see that NYSE has some trading volume for that symbol. Does NYSE just act as the matching engine, fill the orders, and then report the trades to the listing ...
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20 votes
9 answers
8k views

Should I buy a nicer house in a worse area for less than I budgeted?

I am a single male in my mid twenties, based in the UK and looking to buy my first home. I see this home as a 'stepping stone' home and intend to live in it for 5-15 years until I get a partner and ...
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0 votes
0 answers
57 views

Seeking Equity Split Advice between four co-founders, two of them who have invested money and two who haven't

Founder A,B,C,D are equally responsible for the execution and the idea. At the pre-development stage, Founder A invests $12,500 and Founder B invests $7,500, whereas Founder C and D aren't investing ...
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0 votes
1 answer
83 views

Startup Expirable Equity

I own a startup that is user-based. We are close to finishing the building of the prototype so therefore it has no users, no revenues, nor any investment. I have 4 unpaid co-op students working full-...
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0 votes
1 answer
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stockholders equity is higher than total liabilities but the stockholders equity has "()" indicating it is negative. why is that?

Right column of balance sheet full view of balance sheet.
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