The share exchange ratio is impacted by all of the following except for
A) The current share price of the target firm
B) The current share price of the acquirer
C) The offer price for the target firm
D) The number of shares outstanding for the target firm
E) A and D

Question

Quizplus · Accepted Answer

The share exchange ratio is calculated by dividing the offer price for the target firm by the acquirer's share price. Therefore, choices A and B both have an impact on the share exchange ratio. The number of shares outstanding for the target firm also affects the share exchange ratio, as a larger number of shares would result in a lower ratio. However, the offer price for the target firm is directly included in the calculation of the ratio, so it should not be listed as an exception. Thus, the correct answer is E, as it lists two factors that affect the share exchange ratio, rather than one.

The Share Exchange Ratio Is Impacted by All of the Following