Market Capitalization

Market Capitalization

by Richard C. Wilson & Family Offices Group Association Team

Family Office Definition: Market Capitalization

Market Capitalization definition:  Market capitalization (or “market cap”) is a method of classifying companies based on their size.  The total number of outstanding shares is multiplied by the current market price of one share to calculate market cap.  Investors are the primary users of market cap data to define their investable universe.  Small market cap companies are considered more risky than larger market cap companies because of limited access to capital and fewer diversified lines of business.

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