When I look at my Google finance page, and I look at a company, lets say Citigroup for example, and I see that the market cap is 83.45 billion, what does that mean? Does that mean Stock Price X Number of shares outstanding? Because if so, that doesn't add up. Also, by issuing more shares of a stock, does a company affect their market cap?
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Market cap is basically the amount of money that it would cost to buy all of the shares of public stock in a company. Or share cost * number of outstanding shares. It is a measure of how much a company is worth. |
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Market cap is the current value of a company's equity and is defined as the current share price multiplied by the number of shares. Please check also "enterprise value" for another definition of a company`s total value (enterprise value = market cap adjusted for net nebt). Regarding the second part of your question: Issuing new shares usually does not affect market cap in a significant way because the newly issued shares often result in lower share prices and dilution of the existing share holders shares. |
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