What is an index of weighted capitalization?

Dear Capitalization Index is a tool for measuring a stock market in which each stock has an impact that is proportional to its market value. Within this system, they have shares that are worth a lot of money and have many unpaid shares, affect the index more than shares with less value. Many well -known stock indices around the world are indexes of esteem capitalization. The market value is determined by multiplying the share price by the number of available shares. If the company has a share of $ 100 (USD) per share and there are 1 million shares of the company's shares, its market value would be $ 100 million. If the called Company has a share of shares of $ 200, but has only 5,000 shares, its Value market would be $ 1 million - much less than $ 100 million, which has 1 million shares outstanding per $ 100 per share. The company with a much lower price price has significantly higher market value because it has issued more shares.

Total ModnOTA Index weighted capitalization is determined by a combination of market values ​​of companies in the index and its division division. The divisor can be any number and is determined to the index publisher. If two of the above -mentioned hypothetical companies are the only companies in the index, their combined market value would be $ 101 million. If the index publishers select 150,000, the total index would be 673.33.

Companies that have higher market values ​​affect the index of weighted capitalization more than shares that have lower market values. For example, a company that issued 1 million shares would affect the index much more than the second company, because its market value is much higher. For this reason, changes in stock price may have a significant impact on the overall value of the capitalization index.