A company that’s listed on a stock exchange has two values, a Book Value and Market Value.
The Market value is typically a good indication of investors’ confidence in a company and is more commonly referred to as the market capitalisation or ‘market cap’. The Market Cap is the total value of a publicly traded/listed company.
To work out the market value or market cap, you multiply the number of shares outstanding (total amount of shares a company has) by the current share price.
For example, in 2018, Netflix had 0.451 billion shares outstanding, if you times this by their share price of $367.03, their market cap would be $165.5 billion.
0.451 billion x $367.03 = $165.5 billion
Please know, the value of investments can go up as well as down and you may receive back less than your original investment, meaning, when investing your capital is at risk.
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