The market capitalization (or "cap") of a stock is simply the market value of all outstanding shares and is computed by multiplying the market price by the number of outstanding shares. For example, a publicly held company with 10 million shares outstanding that trade at US$20 each would have a market capitalization of 200 million US$.
The value for a stock's "cap" is used to segment the universe of stocks into various chunks, including large-cap, mid-cap, and small-cap, etc. There are no hard-and-fast rules that define precisely what it means for a company to be in one of these categories, but there is some general agreement. Generally
· Large-cap: Over $5 billion
· Mid-cap: $500 million to $5 billion
· Small-cap: $150 million to $500 million
Micro-cap: Below $150 million
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