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9.1What is market capitalization? (recap)

1What is it?

Market cap is the total value the stock market puts on a company: share price × total shares.

2Why does it exist?

It measures size. Size affects stability, liquidity and growth potential.

3Calculation
Market cap = Price × Shares outstanding
  1. Price ₹2,000 × 50 crore shares = ₹1,00,000 crore.
₹1 lakh crore market cap.
4Quick revision
  • Price × shares.
  • Measures size, not quality.
5Knowledge check
Q1. Price ₹500, shares 20 crore. Market cap?Show answer

₹10,000 crore.

Q2. Does a higher share price mean a bigger company?Show answer

No.

Q3. Market cap changes when?Show answer

Every time the share price changes.

More in Level 9: Market Capitalization: Large Cap, Mid Cap and Small Cap