Market Capitalization

The value of a company's outstanding shares, as measured by shares times current price. Speaking very generally, the larger the market capitalization, the safer the company. Firms with very small market capitalizations can be unusually risky.

Everyone's definition differs, but here is a general-purpose breakdown of market capitalization categories:

Giant cap. = over $25 billion

Large cap. = $5 billion to $25 billion

Medium cap. = $1 billion to $5 billion

Small cap. = $250 million to $1 billion

Micro cap. = Under $250 million

Note: For foreign companies, market capitalization is based on ADR shares and does not correspond to the actual market cap in their homeland.



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