Market Capitalization

Definition

The total market value of a company's outstanding shares, calculated by multiplying its share price by the number of shares outstanding.

Often called market cap, this measure shows what the market currently values a company’s outstanding equity at. It changes as the share price moves or the company issues or repurchases shares. Investors often use it to group stocks by company size.

Example

Company A has 10 million shares outstanding, each trading at $20. Its market capitalization is $200 million.