How did 'equity' semantically broaden to mean 'common shares'?
I ask about its meaning for stocks here, not Equity = Assets — Liabilities. See Personal Finance For Canadians For Dummies (2018), p 217.
Equity — not to be confused with equity in real estate — is another word for stocks.
Etymonline:
early 14c., "quality of being equal or fair, impartiality in dealing with others," from Old French equite (13c.),
from Latin aequitatem (nominative aequitas) "equality, uniformity, conformity, symmetry; fairness, equal rights; kindness, moderation,"
from aequus "even, just, equal" (see equal (adj.)).
As the name of a system of law, 1590s, from Roman naturalis aequitas, the general principles of justice which corrected or supplemented the legal codes.
- What semantic notions underlie the nouns bolded overhead with definition 2 beneath?
The OED indicates that the relevant evolution of senses was
1. The quality of being equal or fair [1315]
3. The recourse to general principles of justice to correct or supplement the provisions of the law [1574]
4. In England (hence in Ireland and the United States), the distinctive name of a system of law existing side by side with the common and statute law. [1591]
5. a. An equitable right, i.e. one recognizable by a court of equity. [1629]
5. c. The ordinary shares of a limited company. They carry the right to the residue of a company's assets after it has paid all its creditors, and share in the distribution of profits. [1904]
In other words, an equity [share] carries an equity [a legal entitlement] in Equity [the legal system], which applies equity [the principle] in order to achieve equity [fairness and justice].