Stockholders' equity

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Capital gain. The profit from the sale of a capital asset for more than its purchase price.

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  • S corporation. A small corporation that, under Subchapter S of the Internal Revenue Code, elects to be taxed as a proprietorship or a partnership yet retains limited liability and other benefits of the corporate form of organization.

Stockholders' equity is the phenomenon that represents the amount that stockholders paid the company when shares were purchased and the amount of earnings the company has retained since its origination.


Definitions

According to Fundamentals of Financial Management by Eugene F. Brigham and Joel F. Houston (15th edition),

Stockholders' equity. It represents the amount that stockholders paid the company when shares were purchased and the amount of earnings the company has retained since its origination.

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