Measure company size with market capitalization: test your skills
Market cap is share price × shares outstanding — the market’s price tag for the whole company. Answer each question to see the explanation; your score appears at the end.
This test checks that you can
- Calculate market cap
- Describe common size groups
- Explain cap weighting in indexes
- Practice
1. Market cap equals…
- Practice
2. Does a higher share price mean a bigger company?
- Practice
3. In a cap-weighted index, the most influence comes from…
- Key idea
4. Which statement best explains "Price alone says little"?
- Key idea
5. Which statement best explains "Size and volatility"?
- Key idea
6. Which statement best explains "Big companies drive cap-weighted indexes"?
- Action plan
7. In the action plan, which step comes first?
- Mistake to avoid
8. Which of these is a mistake this lesson warns against?
- Mistake to avoid
9. Which of these is a mistake this lesson warns against?
A company’s shares trade at $25 and it has 80,000,000 shares. What is its market cap, and which common group is it in?
Show the answer
$2 billion — around the small/mid-cap boundary
$25 × 80,000,000 = $2,000,000,000. Exact cut-offs vary by source.
Calculate the market cap of a made-up company: $25 share price, 80 million shares.
More tests in this bootcamp
- What is a stock? Understand ownership and risk
- Compare common and preferred shares
- Follow a stock trade from quote to exchange
- Measure company size with market capitalization
- Read dividend yield without mistaking it for a promise
- Decode the P/E ratio: price compared with profit
- Understand growth and value investing styles
- Follow an IPO from offer price to public trading
- Tell a stock split from share dilution
- Understand market rises, falls and recovery math
- Final exam: Stocks and the market