Series 79 practice questionmediumMerger Consideration
Which form of merger consideration ensures that the target shareholders receive a set dollar amount per share at closing, regardless of the acquirer’s share price?
- AFixed-value
- BFloating exchange ratio✓ Correct answer
- CContingent value right (CVR)
- DFixed-share
Explanation
Why B — Floating exchange ratio
A floating exchange ratio changes the number of acquirer shares so target holders receive a set dollar value. A fixed-share exchange ratio delivers a fixed number of shares whose value fluctuates.
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