An exchange rate

Exchange rate

In finance, an exchange rate between two currencies is the rate at which one currency will be exchanged for another. It is also regarded as the value of one country’s currency in terms of another currency...

 of the shares

Share (finance)

A joint stock company divides its capital into units of equal denomination. Each unit is called a share. These units are offered for sale to raise capital. This is termed as issuing shares. A person who buys share/shares of the company is called a shareholder, and by acquiring share or shares in...

 of the companies that would undergo a merger

Mergers and acquisitions

Mergers and acquisitions refers to the aspect of corporate strategy, corporate finance and management dealing with the buying, selling, dividing and combining of different companies and similar entities that can help an enterprise grow rapidly in its sector or location of origin, or a new field or...

. This is calculated by the valuation of various assets and liabilities of the merging companies.

The swap ratio determines the control that each group of shareholder

Shareholder

A shareholder or stockholder is an individual or institution that legally owns one or more shares of stock in a public or private corporation. Shareholders own the stock, but not the corporation itself ....

s of the companies shall have over the combined firm. It is an indicator of relative values

Relative Values

Relative Values is a 2000 British comedy film adaptation of the 1950s play of the same name by Noel Coward. It stars Julie Andrews, Colin Firth, William Baldwin, Stephen Fry and Jeanne Tripplehorn, and was directed by Eric Styles....

of financial and strategic results of the company.