Questions tagged [equity]
179 questions
22
votes
7 answers
Losing equity if my work is used for a new company
Say there is a small company (C1) that gives me 0.1% equity for building their website since they did not want to pay cash.
Now the founders of C1 stop working on C1 , create a new company C2 and use my website for C2. They sell my website for $1…
rahs
- 353
- 3
- 8
20
votes
9 answers
Should I buy a nicer house in a worse area for less than I budgeted?
I am a single male in my mid twenties, based in the UK and looking to buy my first home. I see this home as a 'stepping stone' home and intend to live in it for 5-15 years until I get a partner and plan on having children and then upgrading to a…
Jsk
- 1,668
- 1
- 13
- 24
19
votes
4 answers
Is it possible for a company to dilute my shares to the point they are insignificant
Say I have invested in a company that has 4 outstanding shares. 3 shares are owned by the founder and 1 by me. Let’s say the valuation of the company is $100.
If the founder wants to increase her ownership share of the company by acting in bad…
str31
- 191
- 1
- 3
18
votes
3 answers
Why would one choose to sell stock back to a company for less than their current market price?
Marathon Petroleum Corporation (MPC) is currently offering to buy back $4 billion USD of their stock (reference).
The minimum they will pay is $56, and the maximum is $63.
Given that this equity is currently trading at $63.61, why would someone want…
user109880
- 181
- 1
- 3
16
votes
3 answers
How to compute worth of my equity?
I am a newly appointed consultant to a startup. I work in another organization which forbids me to receive any salary for being a consultant. However, I am allowed to have an equity.
The startup management has provided following equity to me in the…
r2d2
- 302
- 2
- 7
16
votes
5 answers
What does "Home Equity" do for me?
My wife and I are considering buying a home soon - some of the major reasons are personal, such as being able to perform repairs and updates to the property, and having the security and peace of mind of owning our own property.
But one thing that…
Zibbobz
- 4,384
- 4
- 35
- 48
15
votes
7 answers
Why would a company prevent their employees from selling their pre-IPO equity?
I have heard and read that some non-publicly traded companies prevent their employees from selling their pre-IPO equity. Why would they have such a policy?
For example, from How to Sell Private Company Stock (mirror):
A sale of private stock must…
Franck Dernoncourt
- 11,883
- 13
- 60
- 147
15
votes
2 answers
Do "normal" shares in large companies pay equity, as well as profit?
If I buy shares in a big company like Intel or Microsoft I (can) receive a dividend. So these shares (can) pay "profit".
However, if the company is bought, do i also receive a split of the "equity"/sale price?
user997112
- 261
- 2
- 5
14
votes
1 answer
Do companies only pay dividends if they are in profit?
My understanding of dividends is that the company pays each shareholder a fixed amount of money per share they own. I can see how this would work if the company is in profit, because the company can just say that they will use x % of its profits to…
Karnivaurus
- 601
- 3
- 8
- 13
14
votes
7 answers
Why would you let your mortgage default if you can afford to keep paying it?
I was reading this Wikipedia article about the subprime mortgage crisis, where it says the following (emphasis mine):
By September 2008, average U.S. housing prices had declined by over 20% from their mid-2006 peak. This major and unexpected…
Enduring Lobster
- 284
- 2
- 11
11
votes
3 answers
What is the difference between equity and assets?
I am (going to be) using GNU Cash, which uses the double-entry method; I use it for personal finance.
Reading various tutorials for GNU cash, it lists 5 types of accounts: income, expense, assets, liabilities, and equity, followed by various…
Christopher King
- 577
- 2
- 4
- 14
10
votes
6 answers
How to structure equity buyout?
Years ago, I helped out a friend on his startup as a software engineer. Spent ~500-600 hours on it, was compensated a little under half my hourly rate + 4.5% equity in the company, because the company wasn't really making any money so equity was a…
Pete Jones
- 101
- 1
- 3
8
votes
1 answer
Do ETF owners buy and liquidate units from the market when gap between market value and value of underlying shares is large?
Due to various reasons, an ETF, even an index ETF might trade at a value lower that the value of its underlying securities.
In such a situation, can the company managing the ETF actually buy from the market and convert the ETF units back to raw…
user87166
- 221
- 1
- 4
8
votes
4 answers
Are stocks and bonds actually liquid?
Investopedia gives the standard answer of "yes":
https://www.investopedia.com/ask/answers/032715/what-items-are-considered-liquid-assets.asp
An asset that can readily be converted into cash is similar to cash itself because the asset can be sold…
RonJohn
- 50,786
- 10
- 107
- 170
7
votes
7 answers
I can't understand what equity is
I know there is dozen materials out there on the internet, but I can't wrap my head around equity. From the accounting equation I know that assets = liabilities + equity.
assets are the things the company owns
liabilities are the things that…
Yurii A
- 179
- 1
- 3