Authorized share capital vs Market cap

Question

I learned that a company cannot raise more funds than its authorized share capital. How come then all the public companies have a market cap lot more than their declared authorized capital?

D Stanley · Answer

The Authorized Capital only refers to the initial sale of stock to investors. It does not reflect the rise in value in the secondary market. That additional capital is owned by the investors, not the company.
It's designed to keep the company from issuing new equity capital (and diluting the ownership of existing shares) without shareholder authorization.

Authorized share capital vs Market cap

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