Market Capitalization

value of a business entity equal to its outstanding shares multiplied by the current market price per share. For example, if 5,000,000 shares are issued and outstanding and the market price per share is $10, the company's market capitalization is $50,000,000. Institutional investors including insurance companies and pension plans will not invest in a company unless its market capitalization is a minimum amount (e.g., $100 million) predetermined by them. Higher market capitalization reflects a larger and higher quality company, which is probably more widely held and actively traded.