Define in brief about cash and share exchange, Financial Management

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Define the both cash and share exchange

Generally both cash and share exchange are used to make the offer more attractive. Other forms of consideration include:

Paper consideration can be in form of debt, loan stock andpreference shares. This would mean predator company issues these marketable securities in exchange for Target Company to sell their shares. Predator Company has to consider the impact on gearing and financial risk. Target Company's preference on this would rely on the fact if securities are attractive and how frequently they are traded on stock market (how liquid they are).

 


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