What is 'Market Capitalization'?

Market Capitalization is the total dollar market value of all of a company's outstanding shares. ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌

Term of the Day | Words to Know Market Capitalization Market capitalization refers to the total dollar market value of a company's outstanding shares of stock. Commonly referred to as "market cap," it is calculated by multiplying the total number of a company's outstanding shares by the current market price of one share. As an example, a company with 10 million shares selling for $100 each would have a market cap of $1 billion. The investment community uses this figure to determine a company's size, as opposed to using sales or total asset figures. Using market capitalization to show the size of a company is important because company size is a basic determinant of various characteristics in which investors are interested, including risk. It is also easy to calculate. A company with 20 million shares selling at $100 a share would have a market cap of $2 billion. Read More » Related to "Market Capitalization" Market Capitalization Defined What is market capitalization, what are mega-, large-, mid- and small-cap stocks and how each suits different investing styles. Read More » Market Capitalization vs. Equity: What's the Difference? Understand the difference between market capitalization and equity, two primary measurements used to evaluate the worth of a company. Each term represents a different way of looking at a company's value. Read More » Understanding Small Cap and Big Cap Stocks If you do not realize how big small cap stocks can be, you'll miss some good investment opportunities. Read More » Related Definitions Equity There are various types of equity, but equity typically refers to shareholders' equity, which represents the amount of money that would be returned to a company's shareholders if all of the assets were liquidated and all of the company's debt was paid off. Read More » Fundamentals Fundamentals consist of the basic qualitative and quantitative information that underlies a company or other organization's financial and economic position. Read More » Warrant A derivative that gives the holder the right, but not the obligation, to buy or sell a security at a certain price before expiration. Read More » Dilution Dilution occurs when a company issues new stock which results in a decrease of an existing stockholder's ownership percentage of that company. Read More » CONNECT WITH INVESTOPEDIA Email sent to: mondemand.forex@blogger.com To update your newsletter preferences or unsubscribe, click here. 114 West 41st St, floor 8 New York NY 10036 © 2020, Investopedia, LLC, All Rights Reserved | Privacy Policy