easy · Investment Banking
A buyer is using a Fixed Exchange Ratio of 0.5x in an all-stock deal.
If the buyer's share price drops from $100.00 to $80.00 between signing and closing, how does the value received by the target's shareholders change?
- The value per share decreases by 20%
- The value per share increases to compensate for risk
- The value per share remains constant
- The exchange ratio increases to 0.625x
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