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Differences between Market Value and Market Capitalization

Market price or commonly referred to as market value, is the price of a stock traded in the stock exchange of a company. A stock has a market value that changes every day, depending on the total shares purchased and sold by investors. In contrast to market capitalization, is a value of a company, the market cap changes according to the market price. If you are an Investor then you can see how the market assesses a stock through market value and know the size comparison of a company with other companies through market capitalization.

Market Value

Market value is the first thing to note when studying a stock. Pay attention to the current market price, if you want to own a company's shares then the Investor must pay each share according to the market price listed on the stock exchange. On the stock exchange each company has its own issuer code, such as BBRi for Bank BRI, BBCA at Bank BCA, and many more issuer codes listed on the Indonesia stock exchange. If you want to know the price of a stock then investors can look it up through the keyword of the company's issuer. Market value itself changes based on the laws of supply and demand in the market. The number of requests and offers can be seen in the number of lots listed next to the share price, which indicates how much the investor is currently offering and agreeing to for a share.

Market Capitalization

Whether you are old or new to the world of stocks, of course you are familiar with the term big cap or small cap stocks, or the term market cap, these terms indicate the total value of a company. A market cap represents a value that is considered appropriate for a company by an investor in a given period. Market capitalization can be calculated by multiplying the market price or market value by the number of shares of the company in circulation. In financial statements, outstanding shares are often referred to as common shares and can be further traced to the notes section.

Size

Stock analysts usually group companies by size (market cap). All market cap data presented to the public can be accessed by everyone through the Indonesia Stock Exchange website. Usually companies with a small market cap have a fairly high return rate and fast because they still have the opportunity to grow large, but companies with small market cap also have a high risk as well. On the contrary, companies with large market cap tend to have insignificant profit increases, but the company can be stable due to the size of large companies and trusted businesses.


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