Mid-cap or mid-capitalization is the term that is used to designate companies with a market cap or market value between $2 and $10 billion. As the name implies, a mid-cap company falls in the middle between large-cap (or big-cap) and small-cap companies. Classifications, such as large-cap, mid-cap, and small-cap are approximations of a company's current value; as such, they may change over time.There are two main ways a company can raise capital when it's needed: through debt or equity. Debt must be paid back but can generally be borrowed at a lower rate than equity (due to tax advantages). Equity may cost more, but it does not need to be paid back in times of crisis. As a result, companies strive to strike a balance between debt and equity. This balance is referred to as a firm's capital structure. Capital structure, especially equity capital structure, can tell investors a lot about the growth prospects for a company.One way to gain insight about a company's capital structure and market depth is by calculating its market capitalization. Companies with low market capitalization, also referred to as small-caps, have $2 billion or less in market capitalization. Large-capitalization firms have over $10 billion in market capitalization, and mid-cap firms fall somewhere in between these two categories (ranging from $2 billion to $10 billion in market capitalization). Additional categories such as mega-cap (over $200 billion), micro-cap ($50 million to $500 million) and nano-cap (less than $50 million) have been added to the spectrum of market capitalization for the sake of clarity.Become a supporter of this podcast: https://www.spreaker.com/podcast/investment-terms--4432332/support.

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