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Common equity

• The total investment made by the company's owners consisting of the value of common shares plus retained earnings.

• The ownership of the company may be held by two classes of shareholders, preferred and common. The stock held by the second group is called the common equity of the company. Common equity is useful in measuring the performance of a company's management. See also: Preferred Equity.

 
 

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 Embedded terms in definition
 Common shares
Earnings
Equity
Held
Plus
Retained earnings
Shareholders
Shares
Stock
 
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