is ownership. It is what companies sell to investors to get them to fund a company and what entrepreneurs retain to realize the value of what they have created. Equity represents the value of a company as a going concern. It is the most permanent form of investment in a company. Equity does not require repayment and so does not deplete company cash, as debt repayments do.
Usually, equity takes the form of stock ownership and
is different from rights a person may have under a note, debenture, or
other debt instrument. Convertible debentures have characteristics of
both debt and equity. They are treated as debt until the holder elects
to convert them. Then they lose their debt characteristics and become