Ratio of exchange in market price indicates the market price per share of the acquiring firm paid for each dollar of market price per share of the target firm.

Question

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The ratio of exchange in market price is calculated by dividing the market price per share of the acquiring firm by the market price per share of the target firm. It indicates the amount of stock being offered by the acquiring firm to the shareholders of the target firm for each share they own.

Ratio of Exchange in Market Price Indicates the Market Price