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Share Exchange Ratio Formula

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Exchange Ratio measures the number of shares the acquiring company has to issue for each individual share of the target firm. Check FAQs

ER = \frac{OPTS}{ASP}

ER - Exchange Ratio?OPTS - Offer Price for Target's Share?ASP - Acquirer's Share Price?

Share Exchange Ratio Example

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Here is how the Share Exchange Ratio equation looks like with Values.

Here is how the Share Exchange Ratio equation looks like with Units.

Here is how the Share Exchange Ratio equation looks like.

1.834 = \frac{21.55}{11.75}

1.834 = \frac{21.55}{11.75}

1.834 = \frac{21.55}{11.75}

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Share Exchange Ratio Solution

Follow our step by step solution on how to calculate Share Exchange Ratio?

FIRST Step Consider the formula

ER = \frac{OPTS}{ASP}

Next Step Substitute values of Variables

∴

ER = \frac{21.55}{11.75}

Next Step Prepare to Evaluate

∴

ER = \frac{21.55}{11.75}

Next Step Evaluate

∴

ER = 1.83404255319149

LAST Step Rounding Answer

∴

ER = 1.834

Share Exchange Ratio Formula Elements

Variables

Exchange Ratio

Exchange Ratio measures the number of shares the acquiring company has to issue for each individual share of the target firm.

Symbol: ER

Measurement: NAUnit: Unitless

Note: Value should be greater than 0.

Formulas to find Exchange Ratio

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.

Symbol: OPTS

Measurement: NAUnit: Unitless

Note: Value should be greater than 0.

Formulas to find Offer Price for Target's Share

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.

Symbol: ASP

Measurement: NAUnit: Unitless

Note: Value should be greater than 0.

Formulas to find Acquirer's Share Price

Other formulas in Strategic Financial Management category

Go Earnings Yield

EY = (\frac{EPS}{MPS}) \cdot 100

Go Earnings Yield using PE Ratio

EY = (\frac{1}{PE}) \cdot 100

Go Dividend Rate

DR = (\frac{DPS}{CP}) \cdot 100

Go Value of Right

VOR = \frac{SP - RSP}{n}

How to Evaluate Share Exchange Ratio?

Share Exchange Ratio evaluator uses Exchange Ratio = Offer Price for Target's Share/Acquirer's Share Price to evaluate 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 evaluate Share Exchange Ratio using this online evaluator? To use this online evaluator for Share Exchange Ratio, enter Offer Price for Target's Share (OPTS) & Acquirer's Share Price (ASP) and hit the calculate button.

FAQs on Share Exchange Ratio

What is the formula to find Share Exchange Ratio?

The formula of Share Exchange Ratio is expressed as Exchange Ratio = Offer Price for Target's Share/Acquirer's Share Price. Here is an example- 1.834043 = 21.55/11.75.

How to calculate Share Exchange Ratio?

With Offer Price for Target's Share (OPTS) & Acquirer's Share Price (ASP) we can find Share Exchange Ratio using the formula - Exchange Ratio = Offer Price for Target's Share/Acquirer's Share Price.

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Share Exchange Ratio Formula

Share Exchange Ratio Example

Share Exchange Ratio Solution

Share Exchange Ratio Formula Elements

Other formulas in Strategic Financial Management category

How to Evaluate Share Exchange Ratio?

FAQs on Share Exchange Ratio

Variable Name