Determine the type of exchange ratio in the following Stock-for-Stock transaction.

Transaction Details:
AcquirerCo will acquire TargetCo for stock.TargetCo stockholders will receive $40.00 of AcquirerCo's common stock for each share of TargetCo common stock they hold.

Question

Quizplus · Accepted Answer

In a floating exchange ratio, the number of shares received is based on a fixed dollar amount, which is the case here as TargetCo stockholders receive $40.00 worth of AcquirerCo's stock per share.

Determine the Type of Exchange Ratio in the Following Stock-For-Stock