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What is a market cap? Why do you need to know this definition? The MoneySense Glossary is your resource for learning and understanding financial terms.
Market cap, short for market capitalization, is the total market value of a company’s outstanding shares. To calculate market cap, multiple the number of shares by the market price of one share. (For example, a company with 10 million shares priced at $25 each has a market cap of $250 million.) People in the investing community use market cap to indicate a company’s value and compare its size relative to others in the same industry or sector. Stock exchanges and cryptocurrencies also have a market cap.
Example: “The TSX has a market cap of over US$3 trillion.”
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