Belmarsh and Baylis plc is listed on the main market of the London Stock Exchange.The company has 2 000 000 ordinary shares in issue, with a nominal value of 50p per share.Shares in the company currently trade at 85p, but the average price of one share over the last year has been 95p.The company's directors are planning a rights issue to take place next month at a price of 90p.what is the company's market capitalization?

Question

Quizplus · Accepted Answer

The market capitalization of a company can be calculated by multiplying the current share price by the number of shares in issue. 
Market capitalization = 85p x 2 000 000 = £1 700 000 
Since the directors are planning to issue new shares at a price of 90p, the market capitalization may change after the rights issue takes place. However, based on the information given, the current market capitalization is £1 700 000.

Belmarsh and Baylis Plc Is Listed on the Main Market