Apple's price and market cap, live
What a share actually entitles you to
Owning a share means you own a piece of everything: cash, buildings, patents, and a claim on future profits.
Why companies sell stock and investors buy it
| Why companies sell stock | Why investors buy stock |
|---|---|
| Raise money to grow the business | Expect the company to become more valuable |
| Avoid taking on debt | Earn dividends (a share of profits) |
| Allow founders to cash out partially | Gain voting rights on major decisions |
Find a company's market cap
The market-cap formula
Market Cap = Share Price x Shares Outstanding
Work backward from market cap to share price
Market cap: the standard measure of company size
Going deeper: what retained earnings mean for you
Going deeper (optional). Up next: what retained earnings mean for you — an advanced aside you can skip on first pass and come back to anytime. Continue when you're curious.
Going Deeper — what does retained earnings actually mean for you? If you own 1% of a company that earns $100M and pays $10M in dividends, you received $0.1M in cash and another $0.9M was kept ("retained") by the company on your behalf. That $0.9M does not vanish — it can be reinvested to grow the business, used to buy back shares (which raises your ownership stake), or used to pay down debt, all of which can raise the value of your share over time. Whether those choices pay off comes down to how well management reinvests the money — something you will learn to judge later in the path.
Sit with the ideas.
A company has 1 billion shares outstanding and each share trades at $50. What is the company's market capitalization?
Open your first paper position
Pick a company you already buy from — Apple, Costco, Disney, whoever — and paper-buy 10 shares. Write down WHY you'd own it: what they sell, why you'd be a customer, why you think the business will still be around in 10 years.
Open paper portfolio →Practice mode — simulated trades, not investment advice.