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"Equity" has two related meanings. In financing, it is money a company raises by selling part-ownership (shares), which never has to be repaid but gives the new owners a share of all future profits. On a balance sheet, it is the value left for the owners after subtracting liabilities from assets.

People also use "equities" to mean shares in general, as in "investing in equities".

Example

A company raising ₹100 crore by issuing new shares is raising equity. If it borrowed the ₹100 crore from a bank instead, it would be raising debt.

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