MARKET CAP Formula Description: Market Capitalization is calculated by determining the weighted average number of shares for a given period and then multiplying that number by the closing Stock Price. What Does Market Cap Tell You? The recognition that Market Cap is a function of both share price and share volume is significant for this number tells you more about the real value of the company than the share price alone. In the me a corporation could be trading at a huge P/E multiple but if it only had relatively few shares outstanding then the company would not be worth as much as a company that was trading at a relatively poor multiple but had a large number of shares outstanding. Market Cap is then, the truest indication of the markets estimate of a company's worth. Given the above information, what weight out of 40 would you give to this measure? (Do not enter the $ symbol) Answer: Check