Virtuous cycle of increasing Market Cap

Can enable raising fresh capital for :
– For expansion
– For acquisition
* Due to differential in valuation multiples, companies have differentiated ability to raise capital
* Better valued companies can raise cheaper capital and acquire companies with lower valuation
* Increases the market cap of the combined entity

Better Credit rating
– Lower interest rate charged by banks – leads to better profits, EPS and higher market cap

Prestige of owing a company with large Market Cap