Market capitalization represents
the public consensus on the value of a company. A corporation, including all of its assets, may be freely bought and sold through purchases and sales of stock, which will determine the price of the company's shares. Its market capitalization is this share price multiplied by the number of shares in issue, providing a total value for the company's shares and thus for the company as a whole.
Many companies have a dominant shareholder, typically a government or a family. Most stockmarket indices (DOW, S&P 500, BSE, FTSE, DAX, Nikkei, MSCI) adjust for these by working on a "free float" basis, ie the market cap is the value of the publicly tradable part of the company.
Note that
market capitalization is a market estimate of a company's value, based on perceived future prospects, economic and monetary conditions, and therefore largely independent of a company's history. Stock prices can also be moved by speculation about changes in expectations about profits or about mergers and acquisitions.
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