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
shareholders of the companies shall have over the combined firm: essentially a function of the
relative value of the strategic and
financial result
The financial result is the difference between earnings before interest and taxes and earnings before taxes. It is determined by the earning or the loss which results from financial affairs.
Interpretation
For most industrial companies the fin ...
s 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
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Risk arbitrage Risk arbitrage, also known as merger arbitrage, is an investment strategy that speculates on the successful completion of mergers and acquisitions. An investor that employs this strategy is known as an arbitrageur. Risk arbitrage is a type of even ...
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Stock swap
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Junk bonds
In finance, a high-yield bond (non-investment-grade bond, speculative-grade bond, or junk bond) is a bond that is rated below investment grade by credit rating agencies. These bonds have a higher risk of default or other adverse credit events ...
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Accretion (finance)
In finance, the term accretion refers to a positive change in value following a transaction; it is applied in several contexts.
When trading in bonds, accretion is the capital gain expected when a bond is bought at a discount to its par value ...
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Contingent value rights
References
Corporate finance
Mergers and acquisitions
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