SIE practice questioneasyEquity Securities — Market Capitalization
A company has 50 million shares outstanding trading at $30 per share. What is its market capitalization?
- A$150 million
- BCannot be determined without knowing total assets
- C$1.5 billion✓ Correct answer
- D$15 billion
Explanation
Why C — $1.5 billion
Market capitalization = shares outstanding x market price per share = 50,000,000 x $30 = $1,500,000,000 = $1.5 billion. Market cap does not require knowing total assets (D is wrong). This is a straightforward calculation tested frequently on the SIE.
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