Final answer:
Market capitalization is the value of a company determined by its share price multiplied by the number of outstanding shares, offering investors a measure of the company's total value.
Step-by-step explanation:
When the value of a company is determined by the trading price of its shares multiplied by the number of shares outstanding, this is referred to as the market capitalization or market cap of a company. The trading price reflects how much investors are willing to pay for a share, and when you multiply this by the total number of shares available, you can calculate the total value that the market places on the company as a whole. This metric is significant for investors as it gives them an idea of the size and value of a company.