Often referred to as “market cap”, it is a measure of a company’s total value. It is estimated by determining the cost of buying an entire business in its current state.  

Market Capitalization is the value of a business entity equal to its outstanding shares multiplied by the current market price per share. For example, if 5,000,000 shares are issuedand outstanding and the market price per share is $10, the company’s market capitalization is $50,000,000. Institutional investors including insurance companies and pension plans will not invest in a company unless its market capitalization is a minimum amount(e.g. $100 million) predetermined by them. Higher market capitalization reflects a larger and higher quality company, which is probably more widely held and actively traded.