Sources: IRS, SEC, Federal Reserve, U.S. Bureau of Labor Statistics & U.S. Census Bureau. See our editorial standards.
The total dollar value of a company’s outstanding shares — share price multiplied by shares outstanding.
Definition: The total dollar value of a company’s outstanding shares — share price multiplied by shares outstanding.
Market capitalization measures a company’s size in the eyes of the market. Companies are grouped into large-cap ($10B+), mid-cap ($2B-$10B), and small-cap (under $2B) tiers, each with different risk and growth profiles. Many index funds weight holdings by market cap, so the largest companies have the biggest impact on returns.
Market cap = current share price × total shares outstanding.
A company with 50 million shares trading at $40 has a market cap of $2 billion, placing it on the boundary between small- and mid-cap.
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