Exchange Ratio Determination in a Market Equilibrium

Moretto, Enrico; Rossi, Stefano

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Exchange Ratio Determination in a Market Equilibrium

Managerial Finance, volume 34, number 4, 2008, pp. 262-270

15 Pages Posted: 5 May 2013

See all articles by Enrico Moretto

Enrico Moretto

Dipartimento di Economia, Metodi Quantitativi e Strategie di Impresa - Università di Milano-Bicocca, Milano, Italia; Università di Milano-Bicocca; CNR - IMATI; University of Insubria - Department of Economics

Stefano Rossi

Stockholm School of Economics

Date Written: April 21, 2008

Abstract

The paper aims to present an exchange ratio for merging companies that incorporates the change in the level of riskiness. Its main objective has been achieved exploiting CAPM offers a formula that determines a risk-adjusted exchange ratio that takes into account both risk and synergy.

Keywords: Acquisitions and mergers, Exchange ratio determination

Suggested Citation: Suggested Citation

Moretto, Enrico and Rossi, Stefano, Exchange Ratio Determination in a Market Equilibrium (April 21, 2008). Managerial Finance, volume 34, number 4, 2008, pp. 262-270, Available at SSRN: https://ssrn.com/abstract=2254419