what is the importance of market capitalization?
Market cap is a measure of a company's importance. Companies with higher market caps are given more weight in the major stock indices. Market cap is also important in merger and acquisition activities because it sets a company's market price..
There are two kinds of capitalization which are called as Over-capitalization and another is called as Under-capitalization. Capitalization is very import aspect in determining the value of the company in the market which is based on the economic structure of the company. This aspect depends on the previous records and economics of the company.