In the capital structure of a Public Limited Company, the term equity refers to

In the capital structure of a Public Limited Company, the term equity refers to ordinary shares. Equity refers to the portion of a company's capital that is raised by selling ownership shares to shareholders. In a Public Limited Company, the equity may be raised by selling either ordinary shares or preference shares, but the term "equity" generally refers to ordinary shares. Ordinary shares are also known as common shares and represent the ownership stake of the shareholders in the company. They give shareholders the right to vote on important company decisions, such as the election of board members and other matters that require shareholder approval. In addition, ordinary shareholders may receive dividends when the company is profitable. Preference shares, on the other hand, do not carry voting rights and generally offer fixed dividends, but they have priority over ordinary shares in the event of liquidation of the company. In summary, the term equity in the capital structure of a Public Limited Company refers to ordinary shares, which represent ownership stakes and carry voting rights for shareholders.