Common Equity is the riskiest component of investment for a commercial real estate project. This means that all the investors have equal participation in the money invested and in each potential profit or loss. No individual investor is given priority on how their capital is treated. Since all the investors are allowed to pay at the same time common equity carries the highest attendant risk. If the deal performs well then common equity investments achieve profitability.
Calculating Common Equity: –
Common Equity = Common stock + Surplus Capital + Retained earning
This help page and the information contained herein is provided for informational and discussion purposes only and is not intended to be a recommendation for any investment or other advice of any kind, and shall not constitute or imply any offer to purchase, sell or hold any security or to enter into or engage in any type of transaction.
Investing in venture capital funds is inherently risky and illiquid. It involves a high degree of risk and is suitable only for sophisticated and qualified investors.