Market capitalization popularly known as market cap refers to the total value of all shares issued by a company. Mathematically it is equal to the product of share price and total number of shares.

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Free float market cap refers to the value of total outstanding shares (shares not held by company promoters, government bodies, etc).

Free float market cap is widely used by global indices as it measures the total value of shares being actively traded in the market.

Calculating the market cap helps classify companies into large cap, mid cap and small cap depending on the size. This classification is essential for an investor as thereafter he can choose what category of companies to choose depending on his risk return objectives.

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