What is swap ratio? how it is determined?
Swap ratio is the rate at which one party swaps relative to the other party. Swap rates are often determined by fixed interest rates and/or floating interest rates.
when one company A merge in other companyB.existance of A is merged in B. THAT'S WHY COMPANY B ARE ISSUEING FRESH SHARE OF B TO SHARE HOLDER OF A INPLACE OF THEM.ratio on which share are alloted are called SWAP RATIO.It is determined by mkt price of share if both were listed suppose A price is100/- B Price is 300/-.so, one share of B ALLOTED FOR EVERY three share of A.it is decided on BOOK VALUE OFshare also in same manner.
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