what is market value of equity 
market value of equity is the total dollar value of a company s equity and is also known as market capitalization this measure of a company s value is calculated by multiplying the current stock price by the total number of outstanding shares a company s market value of equity is therefore always changing as these two input variables change it is used to measure a company s size and helps investors diversify their investments across companies of different sizes and different levels of risk investors looking to calculate market value of equity can find the total number of shares outstanding by looking to the equity section of a company s balance sheet understanding market value of equitya company s market value of equity can be thought of as the total value of the company decided by investors the market value of equity can shift significantly throughout a trading day particularly if there are significant news items like earnings large companies tend to be more stable in terms of market value of equity owing to the number and diversity of investors they have small thinly traded companies can easily see double digit shifts in the market value of equity because of a relatively small number of transactions pushing the stock up or down this is also why small companies can be targets for market manipulation investopedia julie bangcalculating market value of equitymarket value of equity is calculated by multiplying the number of shares outstanding by the current share price for example on march 28 2019 apple stock was trading at 188 72 per share as of this date the company s stock buy back program has lowered the shares outstanding from over 6 billion to 4 715 280 000 so the market equity of capitalization is calculated as follows stock price 188 72 x shares outstanding 4 715 280 000 889 867 641 600for simplicity people usually quote the above market value of equity as 889 9 billion the difference between market value of equity enterprise value and book valuemarket value of equity can be compared to other valuations like book value and enterprise value a company s enterprise value incorporates its market value of equity into the equation along with total debt minus cash and cash equivalents to provide a rough idea of a company s takeover valuation the market value of equity is also distinct from the book value of equity the book value of equity is based on stockholders equity which is a line item on the company s balance sheet a company s market value of equity differs from its book value of equity because the book value of equity focuses on owned assets and owed liabilities the market value of equity is generally believed to price in some of the company s growth potential beyond its current balance sheet if the book value is above the market value of equity however it may be due to market oversight this means the company is a potential value buy market value of equity and market profilein general there are three different levels of market capitalization and each level has its own profile companies with a market capitalization of less than 2 billion are considered small capitalization or small caps companies with a market capitalization of between 2 billion and 10 billion are considered medium capitalization stocks also referred to as mid caps companies with a market capitalization over 10 billion are considered large capitalization or large caps each level has a profile that can help investors gain insights into the behavior of the company small caps are generally young companies in the growth stage of development they are risky but have higher growth potential large caps are mature companies they may not offer the same growth potential but they can offer stability mid caps offer a hybrid of the two by owning stocks in each category investors ensure a certain amount of diversification in assets sales maturity management growth rate growth prospects and market depth 