00:00:01welcome to watchmojo.com today’s
00:00:04business school bit is taking a look at
00:00:05the difference between the stock price
00:00:07of a company and its market
00:00:08capitalization people always ask me
00:00:11what’s the most important thing to look
00:00:12at when you’re trying to look at the
00:00:14value of a company is it the stock price
00:00:15and the answer is no not at all the
00:00:18stock price doesn’t really mean anything
00:00:19and the reason for that is that there’s
00:00:21always another issue to consider which
00:00:23is how many shares outstanding a company
00:00:26has trading on a given day so to find
00:00:28the value of a company what you need to
00:00:30do is take the stocks outstanding of a
00:00:33firm and multiply it by the stock price
00:00:35that would give you the market value of
00:00:37the company also known as the market
00:00:38capitalization so when it comes to
00:00:40finding out what the value of a company
00:00:42is disregard the stock price and just
00:00:44take a look at market value and that has
00:00:46been today’s business school bit on
00:00:48watchmojo.com
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