Which of the following expressions accurately describes market cap?
A) It is the product of the number of outstanding shares and the share price.
B) It is the difference between the book value and the market value of a firm's assets.
C) It is the ratio of a firm's equity finance and its debt finance.
D) It is the difference between a firm's account receivables and account payables.

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).

Which of the Following Expressions Accurately Describes Market Cap