Lesson 12 Flashcards
What is market capitalization
Market capitalisation represents the total market value of a company’s outstanding shares of stock.
How is market capitalisation calculated
Calculated by multiplying the current price of one share by the number of shares available.
Why is market capitalisation important
The market cap essentially aids investors on if it is good to invest at a certain time
What is the general features from a small business within the market relating to market capitalisation
They have great potential to grow however are quite risky to invest in
What are the general features from a big business within the market relating to market capitalisation
They are usually quite stable however they have low margins for growth
How does investment with shares work
Shares are bought, hoping that the price will multiply overtime. Shareholders are then payed dividends based on the increase
What is a dividend
Dividends are the percentage of a company’s earnings that is paid to its shareholders as their share of the profits
