What is a company's market cap?

Market cap—or capitalization—refers to the total value of all a company's shares of stock. Knowing a company's market cap can help you compare the relative size of one company versus another.

What is the difference between market capitalization and market cap?

Market capitalization is the total dollar value of all outstanding shares of a company at the current market price. Market cap is used to size up corporations and understand their aggregate market value. Companies may be categorized as large-, mid-, or small-cap depending on their market capitalization.

How do you calculate market cap?

(in mil. US$) Market cap is given by the formula , where MC is the market capitalization, N is the number of common shares outstanding, and P is the market price per common share. For example, if a company has 4 million common shares outstanding and the closing price per share is $20, its market capitalization is then $80 million.

Does market cap affect stock price?

Market cap does not affect stock price; rather, market cap is calculated by analyzing the stock price and number of shares issued. Although a blue-chip stock may perform better because of organizational efficiency and greater market presence, simply having a higher market cap does not directly impact stock prices.