Q&A: What is market capitalization?

Market capitalization (or “market cap”) is the value of a publicly traded company. It is calculated by multiplying the number of shares outstanding (in existence on the open marketplace) by the price per share.

Example: XYZ Company has 10,000,000 shares outstanding that are currently worth $100 each. The market capitalization (or how much they are worth) is $1,000,000,000 (or $1 billion).

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