In
corporate finance, the swap ratio is an
exchange rate of the
shares of the companies that undergo a
merger;
see
Stock swap and .
The swap ratio determines the control that each group of
shareholder
A shareholder (in the United States often referred to as stockholder) of a corporation is an individual or legal entity (such as another corporation, a body politic, a trust or partnership) that is registered by the corporation as the legal ...
s of the companies shall have over the combined firm: essentially a function of the
relative value of the strategic and
financial results of the two companies. This ratio is thus calculated as a function of the
valuation of the various assets and liabilities of the merging companies.
See also
*
Risk arbitrage
*
Stock swap
*
Junk bonds
*
Accretion (finance)
*
Contingent value rights
References
Corporate finance
Mergers and acquisitions
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