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Please describe market capitalization as a valuation method, what are strengths and weaknesses? Then,please discuss book value as a valuation method. Compare it to market capitalization.

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Please describe market capitalization as a valuation method, what are strengths and weaknesses? Then,please discuss book value as a valuation method. Compare it to market capitalization.
Answered 9 days AfterDec 15, 2017

Solution

David answered on Dec 24 2017
34 Votes
Market Capitalization or Market cap is the total value of outstanding shares of a Company (Kenon 2016).
Market Cap=Number of Outstanding shares x Present Cost of 1 share.
For example If a company has 25 million outstanding shares and cost of a single share is $50, then it will have Market Cap of 20 million x $50 =$1 Billion.
Market Cap value is used to estimate the strength and size of a company in terms of potential investment and trade capacity.
i. Market Capitalization can tell the investors about relative size of a...
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