The total value of a company's equity and debt financing, or the market value of all outstanding shares. It represents the total investment in the company and determines its size classification in financial markets.
From Latin 'capitalis' meaning 'of the head' (from 'caput'), referring to the principal sum or main stock. The term evolved because capital represents the 'head' or primary source of a business's financial resources.
Market capitalization is literally what the market thinks a company is worth right now - it's democracy in action where millions of investors vote with their dollars! A company's 'market cap' changes every second the stock market is open, making it a real-time popularity contest with serious financial implications.
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