The worldwide trend toward fuller and more standardized disclosure rules should decrease the cost of equity capital, according to the U.S. school of thought.
Equity in the context of finance refers to ownership of assets that may be accompanied by debts or other liabilities. Liabilities are subtracted from asset values to calculate equity for accounting purposes.
Equity share capital, also called share capital, is the money a company raises by selling shares. It is the money that business owners and investors put toward a company's capital and use to grow or expand the operations of their venture.
By offering an investor a piece of your company, you can raise equity capital. You don't have to pay interest on a loan because the investor owns a portion of the company and receives a cut of the profits.
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