Word of the Day : December 1, 2020

equity \EK-wuh-tee\ noun

Definition

1 a : justice according to natural law or right; specifically : freedom from bias or favoritism

b : something that is equitable 

2 a : the money value of a property or of an interest in a property in excess of claims or liens against it

b : the common stock of a corporation

c : a risk interest or ownership right in property

d : a right, claim, or interest existing or valid in equity

Did You Know?

Equity usually appears in courts of law as a term related to justice or proportional fairness, or in financial offices to property or one's share of a company. The derivative root of the noun, which gained stability in the English language during the 1300s, is Latin aequus, meaning "even," "fair," or "equal"; however, to be fair, it was introduced to English by the French, whose adaptation of the Latin was equité. The French word has clear legal connotations; it means "justice" or "rightness," and those meanings, plus a splash of "fairness," carried over to the English word equity. Noah Webster, himself a lawyer, notes the legal term equity of redemption in his 1828 dictionary defining it as "the advantage, allowed to a mortgager, of a reasonable time to redeem lands mortgaged, when the estate is of greater value than the sum for which it was mortgaged." This use led to the modern financial meanings of equity: "the value of a piece of property after any debts that remain to be paid are subtracted" and "a share in a company or of a company's stock."

Aired December 1, 2020

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