The ordinary shares of a company, especially those of a publicly owned quoted company. In the event of a liquidation, the ordinary shareholders are entitled to share out the asssets remaining after all other creditors (including holders of preference shares) have been paid out. Investment in equities on a stock exchange represents the best opportunity for capital growth, although there is a high element of risk as only a small proportion (if any) of the investment is secured. Although equities pay relatively low profit-related dividends, unlike fixed-interest securities, they are popular in times of low interest rates or inflation, as they tend to rise in value as the value of money falls.
Subjects: Financial Institutions and Services.