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In case of a merger, how can the acquirer company determine the ratio (method of computing) in which it plans to allot shares to acquiree company?
Are there any other methods of computing the ratio besides market capitalization?
Yes, there are a few other methods that companies may use. One is the earnings multiple method, which involves using the acquirer and acquiree companies' earnings per share to calculate the ratio. Another is the book value method, which involves using the value of the companies' assets and liabilities to calculate the ratio.