MARKET CAPITALIZATION
- November 28, 2020
- Posted by: OptimizeIAS Team
- Category: DPN Topics
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Subject : Economics
Context : CPSEs must have Market Capitalization targets : DIPAM.
Concept :
- DIPAM has also asked public sector enterprises to engage with investors “consistently and transparently” to improve market capitalization.
- It has also asked them to pay interim dividends to reward shareholders.
Market Capitalization :
- Market capitalization is the aggregate valuation of the company based on its current share price and the total number of outstanding stocks. It is calculated by multiplying the current market price of the company’s share with the total outstanding shares of the company.
- Market capitalization is one of the most important characteristics that helps the investor determine the returns and the risk in the share. It also helps the investors choose the stock that can meet their risk and diversification criterion.
- For instance, a company has 20 million outstanding shares and the current market price of each share is Rs100. Market capitalization of this company will be 200,00,000 x 100=Rs 200 crore.