What is Market Capitalization?
Market Capitalization (Market Cap) is the value of the company entitled to the shareholders based on the market price. Shareholders are the owners of the company. Therefore, Market Capitalization represents the total value that belong to the company owners. Market Cap is calculated by multiplying the company’s total shares outstanding by the stock price.
where do I find the excel worksheet?
URL to download “PayPal Case Study Materials”: https://www.lumovest.com/paypal-case-study-materials-3/
Despite Equity Value and Market Capitalisation being conceptually the same thing, there are different ways of going about calculating each, and the numbers you turn out for each are rarely going to give the exact same result, right?
Equity Value and Market Capitalization are not only conceptually the same thing, but also numerically the same. The two are the exact same thing and represent the value of the equity of a company entitled to stockholders.
Just that you would only use the term “Market Capitalization” for publicly traded companies, while you can use the term “Equity Value” for both publicly-traded and privately-held companies.
Crystal clear, thanks very much!