A "floating or flexible share exchange ratio is used primarily to
A) Protect the value of the transaction for the acquirer's shareholders
B) Protect the value of the transaction for the target's shareholders
C) Minimize the number of new acquirer shares that must be issued
D) Increase the value for the acquiring firm
E) Increase the value for the target firm

Question

Quizplus · Accepted Answer

A floating or flexible share exchange ratio is primarily used to protect the value of the transaction for the target's shareholders by adjusting the number of shares they receive based on the acquirer's share price, ensuring the deal's value remains relatively constant despite market fluctuations.

A "Floating or Flexible Share Exchange Ratio Is Used Primarily