The market capitalization of a company is an economic measurement of the total monetary value of the company. It provides an approximate measure of how large the company is and how much profit investors expect it to make over time. However, as an individual investor, you are probably not buying whole companies, but instead some number of shares. Therefore, it is important to know how much to pay per share.
Things You'll Need
- Financial data about the company
Calculate the total market value of the company. For a public corporation, this is usually published by the stock exchange on which the company is traded, and is called the "market capitalization" or "market cap." For private companies, you may need to estimate based on news reports, information from other investors or financial reports issued by the company itself.
Determine the number of outstanding shares of the company. For public companies, this is usually published together with the market cap. For privately traded companies, you will need to look up the corporate charter or other publicly available records.
Divide the market capitalization by the number of outstanding shares. The result is the market value per share.
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