Junior Equity

Junior Equity - Junior Equity is the equity that ranks lower than other equity. More specifically, junior equity is common stock. Junior equity is junior for several purposes. Junior equity lines following preferred stock in its claim on company dividends; the latter are promised and guaranteed, while the junior equity depend on either the profits of the company or a decision handed down from the company's board of directors. In the event of bankruptcy, the holders of junior equity have a lower claim on the company's assets, and are behind bondholders and other debt holders. The term is not applicable to voting rights.