Question
A company has 10 million shares of face value Rs.10
each, issued in the market. The current book value of the share is Rs.30 and market price is Rs.50. What is the market capitalisation of the company?Solution
Market capitalisation denotes the market value of a company. It is calculated by multiplying the current share price (market price) by the number of shared issued by the company. In this case Market Capitalisation is 10 million x 50 = Rs.500 million.
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