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Author: Admin | 2025-04-27
Value you get when you multiply all the outstanding shares of a stock by the price of a single share. Calculating the market cap is easy; for example, if a company has 1 million shares outstanding and its share price is $10, the market cap is $10 million.Small cap, mid cap, and large cap aren’t references to headgear; they’re references to how large a company is as measured by its market value. Here are the five basic stock categories of market capitalization: Micro cap (less than $300 million): These stocks are the smallest and, hence, the riskiest available. (There’s even a subsection of micro cap called nano cap, which refers to stocks under $50 million, but they’re not appropriate for this article.) Small cap ($300 million to $2 billion): These stocks fare better than the micro caps and still have plenty of growth potential. The key word here is potential. Mid cap ($2 billion to $10 billion): For many investors, this category offers a good compromise between small caps and large caps. These stocks have some of the safety of large caps while retaining some of the growth potential of small caps. Large cap ($10 billion to $200 billion): This category is usually best reserved for conservative stock investors who want steady appreciation with greater safety. Stocks in this category are frequently referred to as blue chips. Ultra cap or mega cap (more than $200 billion): These stocks obviously refer to companies that are the biggest of the big. Stocks such as Google and Apple are examples.From a safety point of view, a company’s size and market value do matter. All things being equal, large-cap stocks are considered safer than small-cap stocks. However, small-cap stocks have greater potential for growth.Compare these stocks to trees: Which tree is sturdier, a giant
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