When you have equity in a company, it means you:
A) own part of a company and share in its profits.
B) have diversified the company's risk.
C) have diversified your risk by investing with a company.
D) own a portion of the debt obligations of a company.

Question

Quizplus · Accepted Answer

When you have equity in a company, it means you own part of that company and are entitled to a portion of its profits. This is different from owning debt obligations, as debt holders are only entitled to repayment of their principal and interest, while equity holders have an ownership stake in the company's assets and earnings. Option B and C are also investment terms, but they refer to spreading your investment over multiple companies or asset classes to reduce risk, and do not specifically pertain to owning equity in a single company.

When You Have Equity in a Company, It Means You