Questions tagged [equity]

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20
votes
9answers
7k 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 ...
16
votes
3answers
3k views

How to compute worth of my equity?

I am a newly appointed consultant to a startup. I work in another organization which forbids me to receive any salary for being a consultant. However, I am allowed to have an equity. The startup ...
15
votes
2answers
5k views

Do “normal” shares in large companies pay equity, as well as profit?

If I buy shares in a big company like Intel or Microsoft I (can) receive a dividend. So these shares (can) pay "profit". However, if the company is bought, do i also receive a split of the "equity"/...
15
votes
5answers
5k views

What does “Home Equity” do for me?

My wife and I are considering buying a home soon - some of the major reasons are personal, such as being able to perform repairs and updates to the property, and having the security and peace of mind ...
14
votes
1answer
28k views

Do companies only pay dividends if they are in profit?

My understanding of dividends is that the company pays each shareholder a fixed amount of money per share they own. I can see how this would work if the company is in profit, because the company can ...
11
votes
3answers
39k views

What is the difference between equity and assets?

I am (going to be) using GNU Cash, which uses the double-entry method; I use it for personal finance. Reading various tutorials for GNU cash, it lists 5 types of accounts: income, expense, assets, ...
8
votes
4answers
4k views

Are stocks and bonds actually liquid?

Investopedia gives the standard answer of "yes": https://www.investopedia.com/ask/answers/032715/what-items-are-considered-liquid-assets.asp An asset that can readily be converted into cash ...
8
votes
1answer
179 views

Do ETF owners buy and liquidate units from the market when gap between market value and value of underlying shares is large?

Due to various reasons, an ETF, even an index ETF might trade at a value lower that the value of its underlying securities. In such a situation, can the company managing the ETF actually buy from the ...
7
votes
2answers
2k views

Why are goodwill impairments on the statement of cash-flows of GE?

Consider the General Electrics 10-K report for 2018. In the statement of cash flows they report 22,136 million of cash gains attributed to (apparently positive) goodwill impairment in the value of ...
6
votes
2answers
308 views

What are the most common partner equity distribution for startups?

Background I'm doing some due diligence regarding a US registered (Delaware C-corp) tech startup in Europe, where the founders are located and living in the EU. Although the business idea is very ...
6
votes
1answer
300 views

Can two companies cross hold each others 100% shares

Can a company A hold 100% of shares in company B and can this company B have 100% of shares in company A I couldn't find any information that dissolve this activity.
5
votes
2answers
2k views

What does it mean to take equity and get a board seat?

In this article from Forbes: 500 Startups recently took in equity from Abu Dhabi Financial Group, giving the firm one of its only two board seats. What exactly does it mean to take in equity from ...
5
votes
2answers
285 views

How do I assess the value of equity offered by my employer compared to a salary raise?

I work for a small-to-mid-sized (~20 employees) tech startup in Europe. I was hired two years ago as one of the first employees after the founders. When I joined, we had an agreement that after a ...
5
votes
1answer
228 views

Is the risk premium with insurance higher or lower than investments?

Insurance of any kind is always going to have a lower expected value than self-insuring. If there's a 10% chance of a loss of ₹100 occurring, insurance companies will charge more than ₹10, to cover ...
4
votes
1answer
1k views

Calculating equity split in selling a property

Purchased a property with another person in 1998. We remained equitable partners until April, 2009 when the other party stopped paying their share of the mortgage, condo fees, property tax, upkeep. I ...
4
votes
2answers
707 views

GNUCash: How to count up equity?

I'm new to getting my finances in order, and I've decided to use GNUCash to track my spending and general financial health. I'm reading the manual and trying to take control! My trouble and ...
3
votes
2answers
2k views

Selling my house for what is owed to keep from foreclosure but it's worth more. Who gets the extra money?

I am selling my house to a friend (for what I owe on the mortgage) which is $107k because I am behind on my payments and don't want to go through foreclosure, but it's worth $155k who gets the extra ...
3
votes
4answers
3k views

What is the Equity account for in GnuCash?

What is the purpose of Equity account in GnuCash? For example, I have income through Salary account $500, after I have expense by buying book for $5 (so in Expense:Books account is entry for $5). But ...
3
votes
4answers
122 views

When does it make sense for the money paid for equity to go to the corporation?

Consider this scenario: While incorporating BigCo, Jack specifies that the number of founding shares is one million. Jack releases a product and sells it under BigCo. The product doesn't bring enough ...
3
votes
2answers
87 views

In what situation would dilution be pursued by non-founders

A VC seeds a Pre-Seed startup (the status label then change from Pre to Post-Seed). As I understand it, stakeholder objectives include maximizing value (100% of zero is nothing and 20% of $10M is ...
3
votes
1answer
221 views

What is the meaning of ^ symbol for SPX

I've seen symbols SPX and ^SPX, is there any significance for the symbol "^"?
3
votes
1answer
147 views

What motivates Revlon's negative sharedholder's equity?

I am looking at Revlon's 10K and see stockholder's equity is negative.What motivates Revlon's negative stockholder equity? Why does it make sense for them to operate like this?
3
votes
1answer
1k views

UK Tax Return: how to compile it if I have restricted equity granted by my employer

This year I will have to compile my first tax return. I have received the equivalent of 5,000 GBP in restricted stock of the Company I work for. I have already sold these shares and I know that I ...
3
votes
2answers
830 views

How do I determine ownership split on a franchise model?

I was recently approached by a friend (who I consider highly competent) who is looking for financing to open up a franchise. Lets assume the opportunity generally makes sense. My question is: is there ...
3
votes
0answers
77 views

Equity cannot be redeemed at the option of the holder

I was going through Tier 1 Capital on Investopedia. I came across this note a couple of times in the article. Equity capital is inclusive of instruments that cannot be redeemed at the option of the ...
2
votes
1answer
383 views

I am a co-founder departing from a startup with debt, should I cover a portion of the debt on exit? [closed]

I'm a minority partner in an e-commerce startup, now departing due to personal reasons after being with the team for a couple of years. Founders agreement has a clearly outlined 4-year vesting ...
2
votes
4answers
564 views

which types of investments should be choosen for 401k at early 20's?

I am choosing my 401(k) investment options from my company. I am seeing alot of recommendations in stack exchange that at a young age, one should allocate money towards stocks. However in the 401(k) ...
2
votes
2answers
1k views

should I pay off 401k loan while the market is crashing?

I have an outstanding 401k loan for 33k at 5.5%. I wanted to pay it off so not to lose out on the investment opportunity. HOWEVER, the market is crashing and my last quarter 2018 401k statement ...
2
votes
3answers
1k views

When the market crashes, should I sell bonds and buy equities for the inevitable recovery? [closed]

I'm told that for my age, I should have about 1/3 of my portfolio in bonds and 2/3 in equities. Suppose I implement that with this portfolio: 100k of SPY 100k of IWM 100k of TLT Now suppose that ...
2
votes
1answer
3k views

As a technical co-founder, how much equity should I be asking for? Is 20% unreasonable with a 144k salary? [closed]

I am joining a few months before VC pitches. I’m coming on board as CTO and will receive 3% equity vested over 4 years as well as 144k annual salary once the funding goes through. The requirement is ...
2
votes
4answers
546 views

value of guaranteeing a business loan

I am a co-founder in a small business that has a number of investors. We are looking at doing an expansion that includes an capital raise and a SBA loan. The loan is roughly 5 times larger than the ...
2
votes
2answers
128 views

Dilution of investment; how does it happen?

I sometimes hear my investing friends talking about their investments being diluted down, but I've never had the courage to have one of them explain it to me. From my perspective, if you buy 20% of ...
2
votes
1answer
41 views

What category is the following: Naked call or covered write

I would like to do the following: Just before market close on a Monday, buy 100 shares of X and simultaneously sell 1 X call option deep ITM. I have sufficient funds in my account to buy 100 shares ...
2
votes
1answer
395 views

Borrow money to invest in a business venture with equity?

Is it generally considered a financially-sound thing to do for one to borrow money to invest in a business venture, which may not be their own? For example, Jane borrows $50K to put in to a startup ...
2
votes
2answers
111 views

What are some of the key identifiers/characters of an undervalued stock?

How do you identify an undervalued stock? PE? EPS? Book Value?
2
votes
2answers
324 views

Should I invest or repay my debts?

I work in an IT firm company with an average 10% annual hike. Currently I save around 35,000 rupees per month. My family has a debt of 19,00,000 rupees. For the next 5 years I do not have any major ...
2
votes
1answer
44 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 ...
2
votes
1answer
94 views

Equity vs Stock options?

I am a co-founder of a startup in the UK, the other co-founder wants to give me options instead of % equity because he believes when I eventually exit I will pay less tax and the company will too and ...
2
votes
1answer
54 views

Is income made from purchasing equity in a partnership tax-deductible?

I own a business incorporated as an LLC in the US. I'm working out a partnership deal in our operating agreement which allows selected individuals to invest into the partnership (become members of ...
2
votes
1answer
125 views

Need help negotiating a salary agreement with my boss [closed]

I'm a college student who is interning at a startup company. My job as an intern is to help redesign and launch an app, so that it runs on Android as well as iOS. When I signed up for the job I was ...
1
vote
3answers
504 views

Sell a domain name with equity contracts?

I have a few domain names I want to sell. Because some of them have an extremely high potential to earn the buyer big money when turned into a prosperous, profitable business, I've thought about ...
1
vote
2answers
116 views

How can I estimate the outstanding shares of my private employer?

When I joined the startup I currently work for, I was offered a number of shares as part of my compensation. Unfortunately, I've been given no indication as to what they're actually worth with respect ...
1
vote
3answers
111 views

What are some strategies for profitable buying of naked options (call / put)?

I prefer naked options of the index and stocks for obvious reasons. I would like to know some strategies to remain profitable with it. Note: I choose first out the money (strike price) option ...
1
vote
1answer
152 views

If I have equity in a company, can I receive passive income from it?

I'm about to receive equity in a company. Let's say I get 10% ownership. Does that mean that if the company makes $100 in profit every month, they have to give me $10?
1
vote
2answers
103 views

Where to learn about Trusts and alike?

Sadly I have already gone down the Computer Science route for a degree, however I would like to learn more about Trusts, Funds, Equities etc... for a future career or for personal investments. I have ...
1
vote
3answers
158 views

Start-up co-founder Equity vs Salary

What is the best option? I have been asked to work in a high position as co-founder of a startup for 5% equity and $40k salary - this requires over 40 hours of work(hard grind) etc as any position ...
1
vote
2answers
167 views

When should one book profit in investing? [closed]

I would like to know if there is any theory/strategy behind booking profits when it comes to investing? Many times I have observed the stocks rallied 20-40% in the span of 2-4 months. Since I am ...
1
vote
1answer
533 views

How is initial stock price (IPO) of a stock determined

Stock price = Company value / Amount of stocks Who determines company value at IPO? As I understand It is determined by the owner? Or external experts?
1
vote
1answer
802 views

What are “equity assets”?

The definition of equity and the definition of asset are explained in many posts and across the Internet. However, it doesn’t seem possible to me to derive the meaning of "equity assets" from them. ...
1
vote
1answer
229 views

How to interpret equity

I understand Equity to be "Net Worth", as calculated by Assets - Liabilities. I also understand the "Expanded Fundamental Accounting Equation" to be Assets + Expenses = Liabilities + Equity + Income ...