The actual ratio of exchange in a stock?exchange acquisition is the ratio of the
A) market value per share of the target company to the per share market price of the acquiring firm.
B) amount paid per share of the target company to the per share market price of the acquiring firm.
C) book value per share of the target company to the per share market price of the acquiring firm.
D) amount paid per share of the target company to the per share book value of the acquiring firm.

Question

Quizplus · Accepted Answer

The actual ratio of exchange in a stock exchange acquisition is the amount paid per share of the target company to the per share market price of the acquiring firm. This represents the true exchange ratio or value of the transaction. Options A and C refer to market or book value, which may not accurately reflect the true value of the companies involved. Option D refers to the book value of the acquiring firm, which is not necessarily relevant in this context.

The Actual Ratio of Exchange in a Stock?exchange Acquisition Is