Exchange Ratio Forms

This question tests a core merger mechanics concept in accretion and dilution modeling, how stock consideration is translated into ownership and value for target shareholders. Candidates need to understand the link between the number of acquirer shares delivered, the target share count, and how changes in the acquirer’s stock price affect the economics of the deal. Interviewers ask this because exchange ratios sit at the center of stock mergers, valuation sensitivity, and deal negotiation, and they reveal whether a candidate understands how merger terms affect both pre closing pricing and post closing ownership.