large cap investment & finance definition

Short for large capitalization, this designates the largest company type. A large-cap company typically has a market capitalization of over $5 billion, although exact guidelines for what constitutes a large-cap company vary greatly among different classification systems. Market cap is derived by multiplying the price of a company’s stock by the number of outstanding shares. For example, a company with a stock price of $30 and 10 million shares outstanding has a market capitalization of $300 million. Often mutual funds are classified by the type of companies that they invest in, such as large-cap companies.