Equity Investing
Economic Interest
Definition
What is Economic Interest?
The right to participate financially in profits, distributions, or changes in an asset's value.
Example in practice
How This Looks in Practice
An investor may own 5% of the economic interest but less than 5% of the voting power.
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Related Terms
Equity Investing
Common Stock
A share that usually carries voting rights and a residual claim on a company's profits and assets.
Equity InvestingOrdinary Share
The standard ownership share in a company, generally equivalent to common stock.
Equity InvestingPreferred Stock
A class of share that usually has priority over ordinary shares for dividends and liquidation proceeds.
Equity Capital MarketsInitial Public Offering
The first public sale of a private company's shares, after which the shares may trade on an exchange.