Small cap company

A small cap company is a company whose market capitalization (shares x value of each share) is small, under $1 billion.

Overview

A small cap company typically has under $1 billion under control and are hence considered small companies. Small companies generally are not able to secure the best (prime) borrowing rates and wield reduced power, including a smaller market share. Being small, they are also less financially stable than larger companies, and are more likely to become bankrupt. However, they do generally have more growth potential and over time have greater but more volatile expected returns.

See also

This article is issued from Wikipedia - version of the Thursday, May 24, 2012. The text is available under the Creative Commons Attribution/Share Alike but additional terms may apply for the media files.