Shweta Singh

7391 TYBMS FINANCE

It is often referred to as a value weighting system and is a common way

of index weighting. Other methods include price weighting or equal
weighting, which can be slightly misleading because they concentrate
index values in higher-priced stocks that may not be performing well on
other metrics like volume, and in the case of equal weighted indices,
higher-performing stocks are given the same weight as low-performing
stocks.

Market price is a key performance indicator for stocks. Stocks that are
in high demand and have a price above par value or the issue price tend
to have a good investor mood. Long-term high stock prices are a result
of a company's great profitability, which draws a lot of investors to it.

Closely Held Stock: The market cap includes shares that are not freely
traded on the market; therefore, if the percentage of these shares in
the overall shareholding is particularly high, the market cap may be
deceptive. A free float market capitalization is utilized to prevent these
issues.

As previously indicated, different analysts may use different price

metrics; some may use the closing price, some may use the average
price, and still others may use yet another metric. As a result, it's crucial
to comprehend the price component while comparing the market caps
of two stocks or analysts.