Market capitalization is a measure of a company’s size. See how it works and how it impacts your investments at the MoneySense Glossary.
Market cap, short for market capitalization, is the total market value of a company’s outstanding shares, or stocks. 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.
You may have seen the following market capitalization categories on financial news and investing websites (all figures in U.S. currency):
Example: “The TSX has a market cap of over US$3 trillion.”
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