What is the difference between market capitalization and market value of equity?
Is there a difference between market capitalization and market value of equity? Or are they the same thing?
Market capitalization is the total value of a company's outstanding shares (also known as the "float"). You calculate market capitalization by multiplying the number of outstanding shares by by the current market price. Outstanding shares are shares of stock held by shareholders which include institutional investors and restricted shares often held by officers and insiders. Market cap is useful to compare the size of companies by their value rather than by other measurements.
Market value of equity and market capitalization are the same calculation. I hope this helps! Be Prosperous! Peggy
Yes, there might be a difference between the market capitalization and the market value of an equity, depending on how you use the term "market value." First of all, I think by "equity" in this case, you are probably referring to a share of a publicly traded company. Every public company has a specific number of outstanding shares that are available to be bought and sold on an exchange. If you multiply the current price of that share by the number of outstanding shares in the company, you will have the market capitalization value. For example, if XYZ company has 1,000,000 shares outstanding and the current price is $10 per share, the market capitalization of the company would be $10,000,000. You could say this is the current market value of the company. However, some might say the market value of a company is the share price or it's book value. It's a vague term so you would have know in what context it's used.