Tata Consultancy Services crossed the $100 billion mark in terms of market capitalization.
What is ‘Market Capitalization’?
Market capitalization refers to the total dollar market value of a company’s outstanding shares. Commonly referred to as “market cap,” it is calculated by multiplying a company’s shares outstanding by the current market price of one share. The investment community uses this figure to determine a company’s size, as opposed to using sales or total asset figures.
Using market capitalization to show the size of a company is important because company size is a basic determinant of various characteristics in which investors are interested, including risk. It is also easy to calculate. A company with 20 million shares selling at Rs.100 a share would have a market cap of Rs. 2 billion.
(Adapted from The Hindu)