The market capitalization of a public company is $5 billion. Each share of the company is traded at $200. What do you infer from this financial data?
A) The firm's number of outstanding shares is 25 million.
B) The firm pays an annual dividend of 10 percent.
C) The firm's total return to shareholder is $5 billion.
D) The firm's economic value created is $5 billion.

Question

Quizplus · Accepted Answer

Market capitalization (or market cap) captures the total dollar market value of a company's outstanding shares at any given point in time (Market cap = Number of outstanding shares × Share price).

The Market Capitalization of a Public Company Is $5 Billion