Final answer:
Buying equity in a company is similar to purchasing stock, which means you own a piece of the company and may receive dividends and realize capital gains.
Step-by-step explanation:
The purchase of equity in a company gives you proportional ownership of the company. This is most similar to stock. When you buy stock, you become a shareholder and own a part of the company. Each share of stock represents a piece of ownership, and as the company earns profits, it may distribute a portion to shareholders in the form of dividends. Investment in stock offers the potential for capital gains if the value of the stock increases over time. Unlike debt, which includes loans and bonds where a firm is obliged to pay back the borrowed amount with interest, owning stock means you share in both the profits and losses of the company.