What is Market Capitalization?

October 2, 2011

When you are talking about the “mid-cap”, “small-cap” and “large-cap” stocks, you are actually talking about talking about market capitalization!

Market capitalization (market cap) is a measurement of the size of a business enterprise (corporation) equal to the share price times the number of shares outstanding (shares that have been authorized, issued, and purchased by investors) of a publicly traded company.

Market cap or market capitalization is simply the worth of a company in terms of it’s shares! To put it in a simple way, if you were to buy all the shares of a particular company, what is the amount you would have to pay? That amount is called the “market capitalization”!

To calculate the market cap of a particular company, simply multiply the “current share price” by the “number of shares issued by the company”! Just to give you an idea, Tata Motor, has market cap of Rs-49,544.58 Cr. (as on 01/10/11)

Depending on the value of the market cap, the company will either be a “mid-cap” or “large-cap” or “small-cap” company!

Now to know the Market Cap we dont have to do any calculation most of the sites provide that details directly. For example if you visit the following sites.

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