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What is Capitalization?



Capitalization is the long-term funding that allows a business firm to operate. It is the investment that the business owner and any other investors make in the firm. It is a financial term which refers to the sum of the stockholder's equity of the firm and the firm's long-term debt, such as bonds or mortgages.

Also Known As: owner's investment, financing, funding, owner's stake, backing
Alternate Spellings: capitalisation
The capitalization of the large investment bank was not adequate for it to keep operating.

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