--%>

Does the equity of shareholders have clear economic meaning

Does the equity of shareholders represents the savings a company has accumulated by the years?

E

Expert

Verified

No. The number that appears in the Equity of Shareholder of a company which was founded several years ago is just a number that balances the balance sheet. This does not have a clear economic meaning.

   Related Questions in Corporate Finance

  • Q : Could we explain that the shares’ value

    Could we explain that the shares’ value is intangible?

  • Q : Explain accurately value bond options

    If the model could not even find bond prices right, how could this hope to accurately value bond options?

  • Q : Who proposed modern quantitative

    Who proposed a modern quantitative methodology for portfolio selection?

  • Q : Problem on required rate of return

    Tudor Online Publishing Corporation has tax rate of 35%, debt-to-equity ratio of 25%, and has (leveraged) beta 1.25. The riskless rate is 3% and the market return is 12%. Windsor Publishing Company is an all equity company and is in the same business. What is the requ

  • Q : Who was the first to quantify the idea

    Who was the first to quantify the idea of Brownian motion?

  • Q : Define Economy Impacts Economy Impacts

    Economy Impacts: An upcoming economy is indicated by rise in stock market, as stock market is primary indicator of a economic strength of a country. Progressing economy results in market boom. Yield of companies’ increases on improving economy,

  • Q : Applied approaches to theory development

    Discuss and distinguish between the following applied approaches to theory development:  true-income (income statement and balance sheet approaches), efficient markets, and predictive ability.  You may want to include in your discussion any articles or studies that either supported or u

  • Q : Expected return and standard deviation

    If an investor is considered to be risk-averse, what is his/her attitude towards expected return and standard deviation?

  • Q : Is cash flow is a flow of cash to

    The often known as "cash flow" that is net income plus depreciation, is a flow of cash, but is this a flow to the company or to the shareholders?

  • Q : Explain the working of breakthrough for

    Explain the working of breakthrough in low-discrepancy sequences used for option valuation.