Which of the Following Is Not True of Share Exchange

question 59

Multiple Choice

Which of the following is not true of share exchange ratios?

• A) They are used to value target firms
• B) They are used to determine the number of new shares that must be issued by the acquirer in a share for share exchange
• C) They provide useful information to determine the post transaction ownership distribution of the combined firms
• D) They are defined as the offer price divided by the acquirer share price
• E) The share exchange ratio can be less than, equal to, or greater than one

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