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Market Capitalization Formula

The following formula is used to calculate market capitalization (also called market cap or equity market value).

MC = PPS \times S
  • Where MC is the market capitalization (in currency units, e.g., $)
  • PPS is the current price per share ($/share) 
  • S is the number of outstanding shares (shares) 

To calculate market capitalization, multiply the current price per share by the number of outstanding shares.

How to Calculate Market Capitalization?

The following example problems outline how to calculate market capitalization.

Example Problem #1:

  1. First, determine the current price per share ($/share).
    1. The current price per share ($/share) is given as: 10.00.
  2. Next, determine the number of outstanding shares.
    1. The number of outstanding shares is provided as: 1,000,000.
  3. Finally, calculate the market capitalization using the equation above: 

MC = PPS * S

The values given above are inserted into the equation below:

MC = 10.00 * 1,000,000 = 10,000,000.00 ($)

Example Problem #2: 

For this problem, the variables needed are provided below:

current price per share ($/share) = 50

number of outstanding shares = 150105

This example problem is a test of your knowledge on the subject. Use the calculator above to check your answer. 

MC = PPS * S = ?