Market Value Of Equity

AAA

DEFINITION of 'Market Value Of Equity'

The total dollar market value of all of a company's outstanding shares. Market value of equity is calculated by multiplying the company's current stock price by its number of outstanding shares. A company's market value of equity is therefore always changing as these two input variables change. A company's market value of equity differs from its book value of equity because the former does not take into account the company's growth potential.

INVESTOPEDIA EXPLAINS 'Market Value Of Equity'

Market value of equity is basically a synonym for market capitalization. It is used to measure a company's size and helps investors to diversity their investments across companies of different sizes and different levels of risk.

RELATED TERMS
  1. Market Value

    The price an asset would fetch in the marketplace. Market value ...
  2. Floating Stock

    The number of shares available for trading of a particular stock. ...
  3. Outstanding Shares

    A company's stock currently held by all its shareholders, including ...
  4. Large Cap - Big Cap

    A term used by the investment community to refer to companies ...
  5. Market Capitalization

    The total dollar market value of all of a company's outstanding ...
  6. Mid Cap

    A company with a market capitalization between $2 and $10 billion, ...
Related Articles
  1. Understanding Small- And Big-Cap Stocks
    Markets

    Understanding Small- And Big-Cap Stocks

  2. Market Capitalization Defined
    Insurance

    Market Capitalization Defined

  3. 3 Types Of Indexing For ETF Success
    Mutual Funds & ETFs

    3 Types Of Indexing For ETF Success

  4. Understanding The Mutual Fund Style ...
    Mutual Funds & ETFs

    Understanding The Mutual Fund Style ...

comments powered by Disqus
Hot Definitions
  1. Correlation

    In the world of finance, a statistical measure of how two securities move in relation to each other. Correlations are used ...
  2. Letter Of Credit

    A letter from a bank guaranteeing that a buyer's payment to a seller will be received on time and for the correct amount. ...
  3. Due Diligence - DD

    1. An investigation or audit of a potential investment. Due diligence serves to confirm all material facts in regards to ...
  4. Certificate Of Deposit - CD

    A savings certificate entitling the bearer to receive interest. A CD bears a maturity date, a specified fixed interest rate ...
  5. Days Sales Of Inventory - DSI

    A financial measure of a company's performance that gives investors an idea of how long it takes a company to turn its inventory ...
  6. Accounts Payable - AP

    An accounting entry that represents an entity's obligation to pay off a short-term debt to its creditors. The accounts payable ...
Trading Center