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Market Capitalization

How much is a company worth? It's a big question. The IRS wants to know the answer so they know what to charge a company, and investors want to know so they know whether to sink their money into a specific business.

The market also places value on a company, which helps investors compare companies and securities. The market value of a company is known as market capitalization, and you can figure out this number by multiplying the number of shares outstanding by the stock price. 

Find other enlightening terms in Shmoop Finance Genius Bar(f)