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Because market cap is just the crazy value investors have attributed to the company. It doesn't mean the company is any bigger or smaller.
by jjeaff 5y ago
Because market cap is just the crazy value investors have attributed to the company. It doesn't mean the company is any bigger or smaller.
- chii 5y agoBut it means their cost of capital can be lower - for example, by issuing new shares to capture some of that high market cap. Then they can expand much easier than a competitor who cannot get such good rates for new share issuance.