Question

k will merge with h. k will pay market value of share to H share holders. K has 2300 shares oustanding @20. H has 1800 shares @15. what will be value per share of merged firm

Answer 1

Answer:

The exchange ratio is the relative number of new shares that will be given to existing shareholders of a company that has been acquired or that has merged with another. After the old company shares have been delivered, the exchange ratio is used to give shareholders the same relative value in new shares of the merged entity.

Explanation:

$Exchange\:Ratio\:=\frac{\:Target\:Share\:Price}{Acquirer\:Share\:Price}$