Stock, share, and equity are all related to the ownership of a company, but they have slightly different meanings:
- Stock: Stock refers to the ownership units of a company that are available for public trading. It represents a portion of ownership in a company that is publicly traded on a stock exchange. When a company goes public, it issues stock to raise capital, which can be bought and sold by investors on the open market.
- Share: A share is a unit of ownership in a company that represents a percentage of ownership in the company. A company’s share capital is divided into a certain number of shares, which can be owned by individuals, institutions, or other entities. The term “share” is often used interchangeably with “stock.”
- Equity: Equity refers to the ownership interest in a company, which can be measured by the difference between its assets and liabilities. Equity represents the residual value of a company after all debts and other liabilities have been paid. In the context of stocks and shares, equity can refer to the total value of a company’s shares outstanding.
In summary, stock and share are often used interchangeably and refer to a unit of ownership in a publicly traded company, while equity refers to the ownership interest in the company as a whole.
| Share | Stock | Equity |
|---|---|---|
| A share is a single unit of stock | collection of multiple shares are considered as a stock | It is the value of a business organisation’s asset after all their associated dues are paid off. Thus, you can relate equity as ownership of the asset that an investor acquires through buying shares of a company |
| Share are of two types. 1) outstanding share : the total number of shared issued 2) Float share : share that can we traded in open market but this exclude restricted shares as its owned by the company insiders and institutions who regestered their ownership with U.S securities and exchange | Stocks are of two types. 1) common stock : its basic as you buy or sell stocks through stock exchange. 2) preferred stock : it means owners receive an interest income from the ownership of the stock | Equity can be considered in non-corporate business as well. Member in any company with financial stake owns a equity |