Market capitalization, or market cap, is the total value of a company’s shares of stock. If a company has issued 10 million shares, and its share price is $100, its market cap is $1 billion. Market cap is calculated by multiplying the number of stock shares outstanding by the current share price.
What does the market cap of a company mean?
The market cap of a company often says something about the quality of the business underlying the stock as well as how the stock tends to trade. Large-caps are typically known for being stable companies with robust balance sheets. These companies typically show less volatility during market downturns than their mid-and small-cap counterparts.
What is market capitalization & why is it important?
Market capitalization, or market cap, is the total value of a company’s shares of stock. Market cap allows investors to evaluate a company based on how valuable the public perceives it to be. Investing across market caps can help create a diversified portfolio. What is market capitalization?
What factors affect a company's market cap?
Two main factors can alter a company's market cap: significant changes in the price of a stock or when a company issues or repurchases shares. An investor who exercises a large number of warrants can also increase the number of shares on the market and negatively affect shareholders in a process known as dilution . What Is Market Capitalization?
