Market Value Of Equity

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What is the 'Market Value Of Equity'

The market value of equity is 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.

BREAKING DOWN '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.

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RELATED FAQS
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  2. What is the difference between market capitalization and market value?

    Understand the difference between market capitalization and market value, including the elements used for the calculation ... Read Answer >>
  3. What is the difference between book value and market value

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  4. What is the difference between enterprise value and equity value?

    Valuating a business accurately depends heavily on the purpose of the valuation. Learn how enterprise value and equity value ... Read Answer >>
  5. How can I use the equity multiplier to determine if a stock is a good investment?

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