| Understanding
market caps
A company's market capitalization (cap) relates to the size of
the company. The market cap is the current market value of
a company's outstanding shares.
This formula calculates a company's market value:
The number of shares outstanding x current price of each
share = market capitalization
For example, if a company has 10 million outstanding
shares and trades at $13 per share, the market capitalization
is $130 million.
Although there is no consensus classifying stocks by their
cap size, we generally group them as follows:
- Micro-cap = Less than $100 million
- Small-cap = $100 million to $1 billion
- Mid-cap = $1 billion to $10 billion
- Large-cap = More than $10 billion
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