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Company A will merge with Company B. The pricing structure for this transaction is arranged so that the acquirer agrees to provide the target company's shareholders with a fixed dollar amount of its shares in exchange for each target company share, with the exact number of shares to be determined based on the market price of the acquirer's stock during a specified period prior to closing. This is known as a:______.

Respuesta :

Answer:

Fixed market value formula

Explanation:

Market value is considered as the price a product or service would be obtained in the marketplace. Also considered as market capitalization, it is calculated by multiplying the current share price by the outstanding shares.

Using the Fixed market value formula, a fixed dollar amount of shares is exchanged for each target share is agreed upon by the target's company shareholders. The exact shares purchased is determined by the market price during a specified period before closing.

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