Market Capitalization

Market Capitalization reflects the theoretical cost of buying all of a company’s shares, but usually is not what the company could be purchased for in a normal merger transaction. It is a better measure of size than worth. It is calculated by multiplying a company’s shares outstanding by the current market price of one share. It is also used in ranking the relative size of stock exchanges, being a measure of the sum of the market capitalizations of all companies listed on each stock exchange.