Question

Decision Point: Market Capitalization You're also interested in knowing the size of capitalization of various companies because, as an informed investor, you know that larger market cap stocks are less risky, whereas firms with smaller market caps are viewed as considerably riskier. Based on the information provided, compute the market capitalization and categorize the stocks as micro-cap, small-cap, mid-cap, or large-cap. The number of shares outstanding and the share price* have been provided. Drag each description to the correct column and click Submit. Company Name Share Price Number of Shares Outstanding (In millions) $53.85 87.43 1. Acadia Healthcare Company 2. Essendant, Inc. $30.82 37.00 3. Fifth Third Bancorp. $17.25 767.72 4. Zlopharm Oncology $06.04 130.22 5. Yelp Inc. $30.30 76.48 6. Vermilion Energy Inc. $31.32 113.45 7 Yum Brands, Inc. $85.76 407.44

Answer 1

Stock classifications are based on their market capitalization.

Market capitalization is calculated as share price*number of shares outstanding.

The market caps are, as follows:

S.No. 1 2 3 4 Company name Acadia Healthcare Essendant Inc Fifth Third Bancorp Ziopharm Oncology Yelp Inc Vermillion Energy Inc Yum Brands Inc Whirlpool Corporation Coach Inc Big 5 Sporting Number of shares Market capitalization Share price 0/S (in millions) (in millions) 53.85 87.43 4708.11 30.82 37.00 1140.34 17.25 767.72 13243.17 6.04 130.22 786.531 30.30 76.48 2317.34 31.32 113.45 3553.25 85.76 407.44 34942.05 171.38 75.97 13019.74 41.56 278.03 11554.93 9.85 22.02 216.90 5 6 7 8 9 10

Based on this, the stocks are divided into the categories:

1). Micro-cap stocks' market capitalization ranges from $50 million to $300 million.

2). Small-cap stocks' market capitalization ranges from $300 million to $2 billion.

3). Mid-cap stocks' market capitalization ranges from $2 billion to $10 billion.

4). Large-cap stocks' market capitalization is over $10 billion.

Based on this, the stocks are classified as follows: