Interest and Money Markets

Equity: Public Equity vs Private Equity

Equity is an important element in the business and investment world. Equity is the ownership of the company shares. Such assets or shares may also have debts or liabilities attached to them.

They constitute the shareholder’s money in the company and would be returned to them if all the shares had been liquidated.

Businesses have a range of options to raise capital and attract investors. Generally, debt and equity are the two most common options — each of which can be formulated in a variety of ways. Equity enables a company to provide investors with a share of the company for which they earn returns as the business grows.

Both public and private equity have benefits and drawbacks for both businesses and investors.

Some of the main disparities between private and public equity is that private equity investors are usually paying out by dividends rather than stock accumulation.

The advantage of public equity is its liquidity, because most publicly traded stocks are available and easily traded on a daily basis through public market exchanges.

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