Equity Participation

Equity Participation
Ownership of shares in a company or property. Equity participation may involve the purchase of shares through options or by allowing partial ownership in exchange for financing. The greater the equity participation rate, the higher the percentage of shares owned by stakeholders. Allowing stakeholders to own shares ties the stakeholders' success with that of the company or real estate investment. In this case, a more profitable company will provide stakeholders with greater gains.

Equity participation is used in many investments for two primary reasons. First, it is used to tie the financial rewards of executives to the fate of the company, increasing the likelihood that executives will make decisions that will improve company profitability. This type of compensation may be delayed, reducing the possibility of executives making short-term decisions to boost share price. Second, it is used by companies operating in emerging economies in which local governments want to reap the rewards brought on by development. Moreover, share ownership also allows local governments a say in company decisions.

Investment dictionary. . 2012.

Look at other dictionaries:

  • Equity investment — generally refers to the buying and holding of shares of stock on a stock market by individuals and funds in anticipation of income from dividends and capital gain as the value of the stock rises. It also sometimes refers to the acquisition of… …   Wikipedia

  • Equity-indexed annuity — An equity index annuity in the United States is a type of tax deferred annuity whose credited interest is linked to an equity index SEE EXAMPLE HERE>> [http://ffradvisor.com/marketindex.html] , and typically uses the S P 500 or international… …   Wikipedia

  • Equity-Linked Note — An Equity Linked Note (ELN) is a debt instrument, usually a bond, that differs from a standard fixed income security in that the final payout is based on the return of the underlying equity , which can be a single stock, basket of stocks, or an… …   Wikipedia

  • Equity (finance) — For equity securities, see Stock. Accountancy Key concepts Accountant · Accounting period · Bookkeeping · Cash and accrual basis · Cash flow management  …   Wikipedia

  • equity equivalent contingent participation —    American    a loan illegally tied to future profitability    One of the evasions describing methods which allow banks to participate in speculative ventures:     Our interest wouldn t be in stock, of course. Glass Steagall rules that out. It d …   How not to say what you mean: A dictionary of euphemisms

  • Participation Certificate —    These US certificates represent an interest in mortgage loans. The buyer receives the cash flows and is the owner, but the seller remains the mortgagee of record. In Switzerland, a participation certificate is a non voting form of equity… …   Financial and business terms

  • Participation —   A direct or indirect interest in the equity of a company, with the purpose of creating a long lasting relationship with the company to the benefit of the own (= reporting entity s or the bank s) activities.   The main operation field of such a… …   International financial encyclopaedia

  • Online participation — Several motivations lead people to contribute to virtual communities. Various online media (i.e. Blogs, Chat rooms, Electronic mailing lists, Internet forums, Wikis), are becoming ever greater knowledge sharing resources. Many of these… …   Wikipedia

  • Actors' Equity Association — Infobox Union name= Actors Equity country= United States affiliation= AFL CIO members= 45,000 stage actors and stage managers full name= native name= founded= 1913 current= head= dissolved date= dissolved state= merged into= office= New York City …   Wikipedia

  • Gender Equity Education Act (Taiwan) — Gender Equity Education Act ( zh. 性別平等教育法) of Republic of China was announced on 2004 June 23. The General Provisions states the purposes of the act: to promote substantive gender equality, eliminate gender discrimination, uphold human dignity,… …   Wikipedia

Share the article and excerpts

Direct link
Do a right-click on the link above
and select “Copy Link”

We are using cookies for the best presentation of our site. Continuing to use this site, you agree with this.