I've always learned that total capitalization was calculated as Debt + Market Cap (Equity). I just saw a model today which used Total Equity (the entire Shareholders' Equity section of the Balance Sheet) instead of market cap. I would really appreciate it if someone could help me out on this issue.
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Not sure what your question is...
I'm guessing you want to know whether it's correct to use the market value of equity and debt or the book value. The answer to that question (depends a bit on the context, but I'll go with the more likely scenario) would be to use the market value.
I'm a bit more curious about the context. I know that in the majority of cases, we use market value. When would the book value be more appropriate?
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