How to Calculate the Net Market Value of Common Equity

by Eric Feigenbaum

Net market value of common equity is another term for the market capitalization of a common stock. Market capitalization is the total value of a company's common shares on the open market. Investors care about market capitalization because it's an indicator of a company's strength and size. A corporation with market capitalization of over $200 billion is considered a mega cap stock, often known as a blue chip -- meaning it's considered one of the world's top companies and in general presents less risk than a small-cap stock.

Step 1

Look up the current trading price of a company whose market capitalization you want to determine. Because market capitalization changes constantly, a live source of information such as a website that gets real-time price quotes will improve accuracy.

Step 2

Check the number of outstanding common shares of stock your target company has issued. You can find this on most online stock price websites, in newspaper stock listing, from a stock guide such as Standard & Poor's or Moody's.

Step 3

Multiply the stock price by the number of outstanding shares. The result is your stock's market capitalization. For example, a company selling at $25 a share with 100,000 shares outstanding has a market capitalization of $2.5 million -- which classifies it as a so-called nano cap stock as it has a market capitalization of less than $50 million.

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