Incorporate finance, theswap ratio is anexchange rate of theshares of the companies that undergo amerger; seeStock swap andMergers and acquisitions § Stock.
The swap ratio determines the control that each group ofshareholders of the companies shall have over the combined firm: essentially a function of therelative value of the strategic andfinancial results of the two companies. This ratio is thus calculated as a function of thevaluation of the various assets and liabilities of the merging companies.[1]
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