Market capitalization

Market capitalisation or market cap is the value of the total outstanding shares of a company. It is calculated by multiplying the total number of shares issued by the company with the price of a share.

Source: Tavaga Research

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Market capitalisation is used to categorise the stocks of companies to help investors pick them according to their risk profile.

There are large cap, mid cap and small cap companies.

Some investors, however, prefer to refer to free float market cap than just market cap.