Valuation

Market Capitalization

By May 27, 2019September 21st, 20215 Comments

What is Market Capitalization?

Market Capitalization (Market Cap) is the value of the company entitled to the shareholders based on the market price. Shareholders are the owners of the company. Therefore, Market Capitalization represents the total value that belong to the company owners.  Market Cap is calculated by multiplying the company’s total shares outstanding by the stock price.

  • Samuel Mehari 6 months ago

    Hi Guys,
    where do I find the excel worksheet?

  • Lumovest 2 years ago

    URL to download “PayPal Case Study Materials”: https://www.lumovest.com/paypal-case-study-materials-3/

  • Anthony Shore 2 years ago

    Despite Equity Value and Market Capitalisation being conceptually the same thing, there are different ways of going about calculating each, and the numbers you turn out for each are rarely going to give the exact same result, right?

    • Lumovest 2 years ago

      Equity Value and Market Capitalization are not only conceptually the same thing, but also numerically the same. The two are the exact same thing and represent the value of the equity of a company entitled to stockholders.

      Just that you would only use the term “Market Capitalization” for publicly traded companies, while you can use the term “Equity Value” for both publicly-traded and privately-held companies.

      • Anthony Shore 2 years ago

        Crystal clear, thanks very much!

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