Definition: A company's market capitalization, or market cap as it is often called on Wall Street, refers to the total value of a company's outstanding stock. It is calculated by taking all of the outstanding shares and multiplying that number by the current stock price.
Put another way, the market capitalization of a company is the price it would take to buy all of the shares of stock at the current market price. It isn't the true economic cost of buying the business because it doesn't factor in debt like enterprise value.
