equity

Examples of equity in the following topics:

• Trading off Equity and Efficiency

  • Vertical equity usually refers to the idea that people with a greater ability to pay taxes should pay more.
  • The range can be identified as conforming to the concept of horizontal equity.
  • Vertical equity follows from the laddering of income tax to progressively higher rates.
  • Proportional taxes, conform to horizontal equity.
  • Explain tax equity in relation to the progressive, proportional, and regressive nature of taxes.

• Cost of capital

  • There are multiple sources of funds, but they are broadly categorized as debt (borrowing money) and equity (selling shares) financing.
  • In order to determine a company's cost of capital, the cost of debt and the cost of equity must be calculated.
  • The cost of equity is determined by comparing the investment to other comparable investments with similar risk profiles.
  • This determines the "market" cost of equity.
  • where D is the value of debt in the company, E is the value of equity, rd is the cost of debt, t is the tax rate, and re is the cost of equity.

• Capital Market

  • A capital market is a financial exchange for the buying and selling of long-term debt and equity-backed securities.
  • A capital market is a financial exchange for the buying and selling of long-term debt and equity-backed securities ( ).
  • Governments tend to issue only bonds, whereas companies often issue either equity or bonds.

• The Role of the Financial System

  • Equity markets are the most closely followed of the financial markets.

• Consequences of Banking Crises

  • Banks coordinate and economy's savings and investment: the act of pooling money to capture higher returns for everyone while simultaneously funding business dependent upon leveraging debt and equity.
  • The fall in liquidity and investment drives up unemployment, drives down governmental tax revenues and reduces investor and consumer confidence (damaging equity markets, which in turn limits businesses access to capital).

• Performance

  • From an equity perspective we tend to believe that anyone who uses or consumes a good should bear the opportunity costs that result from that use.

• Criteria to evaluate alternatives

  • The problem with Pareto Potential is that it introduces the question of equity.
  • Equity is a judgment about the rightness or wrongness of the objective.

• Institutions, Markets, and Intermediaries

  • Other financial intermediaries include: credit unions, private equity, venture capital funds, leasing companies, insurance and pension funds, and micro-credit providers.

• The Importance of Aggregate Decisions about Consumption versus Saving and Investment

  • The wealth effect is specifically related to the value of assets; market participants will adjust consumption in-line with their perception of the appreciation or depreciation of held assets (a home; equity investments, etc.).

• Defining and Measuring Economic Mobility

  • While women have made great strides in some countries, many global economies still struggle to incorporate women into the workplace with equity.