How is equity best defined in a business context?

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Funds available as cash within the companyThe debts or obligations owed by the companyThe owner's residual interest in the company's assets after liabilitiesThe owner's rights over the company’s debtsNone of the above

Explanation

Equity represents the owner's residual claim on the company's assets after all liabilities have been settled. It is not simply cash or liabilities, but the net value owned by the business owner.