Market Capitalization - Definition & How to Calculate
What is market capital of a company Market capitalization, often called market cap, measures a company's total value in the stock market. It is calculated by multiplying the current share price by the total outstanding shares. Market cap reflects the perceived worth of a company by investors and is used to compare companies of different sizes within the same industry. Market Capitalization Calculator Now the question arises how do you calculate the Market Cap ? To calculate market capitalization, multiply the current share price by the total outstanding shares. For example, if a company has 10 million outstanding shares and each share is trading at $50, its market cap would be $500 million. It provides valuable insight into a company's size and allows investors to gauge its potential risk and return. Market cap categories are often used to classify companies into small-cap, mid-cap, or large-cap based on their total value. Small-cap companies have lower market caps and are ofte