Share Exchange Ratio Solution

STEP 0: Pre-Calculation Summary
Formula Used
Exchange Ratio = Offer Price for Target's Share/Acquirer's Share Price
ER = OPTS/ASP
This formula uses 3 Variables
Variables Used
Exchange Ratio - Exchange Ratio measures the number of shares the acquiring company has to issue for each individual share of the target firm.
Offer Price for Target's Share - Offer Price for Target's Share is the price at which an acquiring company proposes to purchase the outstanding shares of the target company during a merger or acquisition.
Acquirer's Share Price - Acquirer's Share Price is the current market value of a single share of the acquiring company's stock in a merger or acquisition context.
STEP 1: Convert Input(s) to Base Unit
Offer Price for Target's Share: 21.55 --> No Conversion Required
Acquirer's Share Price: 11.75 --> No Conversion Required
STEP 2: Evaluate Formula
Substituting Input Values in Formula
ER = OPTS/ASP --> 21.55/11.75
Evaluating ... ...
ER = 1.83404255319149
STEP 3: Convert Result to Output's Unit
1.83404255319149 --> No Conversion Required
1.83404255319149 1.834043 <-- Exchange Ratio
(Calculation completed in 00.004 seconds)
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Credits

Created by Keerthika Bathula
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Institute of Chartered and Financial Analysts of India National college (ICFAI National College), HUBLI
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Value of Right using New Shares
Value of Right = Number of New Shares*(Market Price-Issue Price of New Share)/Total Number of All Shares
Value of Right
Value of Right per Share = (Stock Price-Right Subscription Price)/Number of Rights to Buy a Share
Conversion Parity Price
Conversion Parity Price = Value of Convertible Security/Conversion Ratio
Share Exchange Ratio
Exchange Ratio = Offer Price for Target's Share/Acquirer's Share Price
Earnings Yield
Earnings Yield = (Earnings per Share/Market Price per Share)*100
Dividend Yield
Dividend Yield = (Dividend per Share/Market Price per Share)*100
Dividend Rate
Dividend Rate = (Dividend per Share/Current Share Price)*100
Earnings Yield using PE Ratio
Earnings Yield = (1/Price-Earnings (PE) Ratio)*100

Share Exchange Ratio Formula

Exchange Ratio = Offer Price for Target's Share/Acquirer's Share Price
ER = OPTS/ASP

What is Share Exchange Ratio ?

The share exchange ratio is a fundamental aspect of mergers and acquisitions, representing the ratio at which shares of the acquiring company will be exchanged for shares of the target company during the merger process. It essentially quantifies the relationship between the two companies' shares, with a higher ratio indicating a more favorable deal for the target company's shareholders, as they receive a greater number of shares in the acquiring company for each of their shares in the target company, and vice versa for a lower ratio. This ratio is carefully determined based on financial evaluations, market conditions, and negotiations, playing a pivotal role in shaping the ownership structure and value proposition of the combined entity post-merger.

How to Calculate Share Exchange Ratio?

Share Exchange Ratio calculator uses Exchange Ratio = Offer Price for Target's Share/Acquirer's Share Price to calculate the Exchange Ratio, The Share Exchange Ratio represents the number of shares of the acquiring company offered in exchange for each share of the target company during a merger or acquisition. Exchange Ratio is denoted by ER symbol.

How to calculate Share Exchange Ratio using this online calculator? To use this online calculator for Share Exchange Ratio, enter Offer Price for Target's Share (OPTS) & Acquirer's Share Price (ASP) and hit the calculate button. Here is how the Share Exchange Ratio calculation can be explained with given input values -> 1.834043 = 21.55/11.75.

FAQ

What is Share Exchange Ratio?
The Share Exchange Ratio represents the number of shares of the acquiring company offered in exchange for each share of the target company during a merger or acquisition and is represented as ER = OPTS/ASP or Exchange Ratio = Offer Price for Target's Share/Acquirer's Share Price. Offer Price for Target's Share is the price at which an acquiring company proposes to purchase the outstanding shares of the target company during a merger or acquisition & Acquirer's Share Price is the current market value of a single share of the acquiring company's stock in a merger or acquisition context.
How to calculate Share Exchange Ratio?
The Share Exchange Ratio represents the number of shares of the acquiring company offered in exchange for each share of the target company during a merger or acquisition is calculated using Exchange Ratio = Offer Price for Target's Share/Acquirer's Share Price. To calculate Share Exchange Ratio, you need Offer Price for Target's Share (OPTS) & Acquirer's Share Price (ASP). With our tool, you need to enter the respective value for Offer Price for Target's Share & Acquirer's Share Price and hit the calculate button. You can also select the units (if any) for Input(s) and the Output as well.
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