Question

. Equity Equity/Definitions/Types, Equity of private and publicly traded companies. - Selecta popular publicly traded company, find on which stock market is it traded; find how large is its equity and prise par share; find when it had IPO and what was the price per share then; how large was its equity before IPO.

Answer 1

In accounting parlance equity is the difference between the value of assets and value of liabilities of something owned by an individual or an entity. In trading terms it is said to be the value of shares issued by a company. Equity can thus be said to be the amount of capital that is contributed by the owners of a company. The different types of equity are common stock, preferred stock, and treasury stock. Common stocks pay dividends depending on the profits of the company while preferred stocks pay a predetermined dividend. Treasury stock is the amount that is paid to buy back shares and hence has a negative balance. Equity also exists in the form of retained earnings and additional paid in capital. Equity of private companies is not traded in a stock exchange while equities of public companies are traded in a stock exchange and is owned by a large number of stockholders.

A publicly traded company that I have selected is Facebook Inc. The stock market in which its shares are traded is NASDAQ. The equity of Facebook has a current market value of around $414.40 billion and its price per share is $144.20 (current price). Facebook had its IPO on May 18, 2012 and its share price then was around $26.81 per share. Before the IPO the equity of the company stood at around $78 billion.