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Investment term of the day: market capitalisation

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Market capitalisation, sometimes called market cap, is calculated by taking the number of outstanding shares of stock multiplied by the current price-per-share.

The market capitalisation can be used as a proxy for public opinion on a company’s net-worth and can be used to determine a company’s size rather than sales or total asset figures. It can be a determining factor in some forms of market valuation.

Investopedia definition

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