The National Directory of Certified Public Accountants

Ask A CPA - Investments & Financial Planning

What Are Small-Cap, Mid-Cap And Large-Cap Stocks ?

"Cap" refers to a company's stock market capitalization. This is a gauge of what the market or investors believes the entire company to be worth. Capitalization is the company's stock price per share multiplied by the total number of shares outstanding. Market "caps" can change daily if there is a change in the stock price. Small cap is less than $1.5 billion, Mid cap is between $1.5 billion and $10 billion and Large cap is over $10 billion. Different index's are used to report on large-cap stocks. The most well-known and widely used is the Standard and Poors 500. Other large-cap index's are the Russell 1000 and the Wilshire Large Cap 750 Index. The majority of large-cap stocks are in the financial services, technology and healthcare industries.

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