* Large-cap refers to companies that are valued at more than $5 billion. This value is determined by something called market capitalization. Market capitalization is (stock price) × (number of shares issued). For example, let’s say Joey’s Donuts issued 500,000 shares to investors, and each share is worth $130. Joey’s Donuts’ market capitalization would then be ($130) × (500,000) = $65,000,000. Large-cap companies are usually seen as stable and, dare I say, safer investments because their sheer size makes them less likely to go under. While not entirely true, the phrase “too big to fail” comes to mind.