NISM Certifications · NISM-Series-XXI-A: Portfolio Management Services (PMS) Distributors · Investing in Stocks (NISM XXI-A)
A company with 40 crore shares outstanding trades at Rs 250 per share. What is its market capitalisation?
The market capitalisation is Rs 10,000 crore. It is found by multiplying the 40 crore outstanding shares by the market price of Rs 250 per share, which gives the total market value of the company's equity.
- ARs 1,000 crore
- BRs 6,250 crore
- CRs 10,000 croreCorrect
- DRs 100 crore
Explanation
Market capitalisation = number of shares x market price = 40 crore x Rs 250 = Rs 10,000 crore. Rs 1,000 crore results from a decimal slip, and Rs 6,250 crore comes from dividing 250 by 40 and multiplying by 1,000, which is meaningless.
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