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A fundamental term in finance is market capitalization. It represents a company's total value in the stock market and is calculated by multiplying the number of outstanding shares by the current stock price. This metric is crucial for investors as it provides insight into a company's size and worth. It is particularly useful for comparing companies within the same industry, as it takes into account both the number of shares and the price per share. So, when evaluating potential investments, be sure to pay attention to a company's market capitalization.
