What Is Common Equity Made Up Of?

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Common equity is made up of a few specific things. Learn what common equity is made up of with help from a business consultant and marketing expert in this free video clip.

Part of the Video Series: Finance Questions
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Video Transcript

Hello I'm Isaac Rodriguez, a business consultant. I want to talk to you today about what is common equity. Well common equity is only the equity of the common stock of a corporation but does not take into account any of the preferred stock. So no preferred stock. It is the shareholder's equity, the equation would be shareholder's equity minus preferred. That gives you your common equity. So it only takes into account the common stockholders, common equity only takes into account the common stockholders. It does not include the preferred shareholder's equity at all. The preferred stock is not included. I'm Isaac Rodriguez, business consultant and that is common equity.


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