Exchange ratio
The ratio at which shares in a company being reorganised are exchanged for securities of the successor.
How to read the number
For a minority holder the entire economics of an absorption reduces to it: how many securities he receives for his own is the deal, as far as he is concerned.
When the metric lies
The ratio is approved in advance while trading continues to the last day. A gap between the market price relationship and the exchange ratio is the normal state of affairs, not an error.
Also known as: exchange ratio