Market Capitalization

Transcript

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What is market capitalization?

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Market cap refers to how much a company is worth as determined by the stock market.

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Defined as the total market value of all outstanding shares.

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To calculate, multiply the number of outstanding shares by current market value of one share.

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www.website.com

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Why is it important?

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Market cap reflects what investors are willing to pay for its stock. It also shows the potential future of the stock.

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The higher the market cap, the less risk for investors because the growth is steady.

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Examples

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Mega Cap ($200 billion+)

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Large Cap ($10 bil-$200bil)

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Mid Cap ($2 bil- $10bil)

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Ex. The Coca-Cola Company

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Ex. Apple (AAPL)

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CG Consumer Electricals

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Small Cap ($300 mill-$2 bil)

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Penn Virginia corp

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How does the cap grow? If there is a high demand for shares, the price would increase.