It is also known as market capitalization. It means the value of the company’s equity share capital prevailing in the market. The market value of the equity calculator facilitates a quick calculation to find out what is the market capitalization of the company or what weightage the market gives to such companies from a share price perspective.
The formula to calculate the market value of equity is:
Market Value of Equity = Market Price per Share * Total Number of Outstanding Equity Shares
Market Value of Equity Calculator
How to Calculate using Calculator?
The user has to enter the following two variables into the market value of the equity calculator.
Market Price per Share – The market price of a share means the price at which such shares trade in the open market. There are different ways that we can use to determine the market price per share. But the most popular of all is the dividend discount model. It considers all the future cash flows (dividend) on such shares to be received and discounts them to their present values.
For listed companies, it is the prevailing share price on the stock exchange.
Total Number of Outstanding Shares – Enter the total number of outstanding shares of the company. The company may not have issued all the shares as mentioned in its authorized share capital. Therefore, we only consider the number of shares issued by the company as only those shares trade in the market and hence, can have a market value.
