Equity represents the residual interest in a business or property after deducting any mortgage or liabilities. Which of the following are also encompassed by the term equity?

Show Answers

The market value of assets minus any outstanding debts, including common and preferred sharesCapital raised by a company through issuing sharesBoth of the aboveNeither of the above

Explanation

Equity includes both the market value of assets after subtracting liabilities, including common and preferred stock, and the funds a business obtains by selling its shares. Therefore, both A and B are correct.