Multiple choice

Many times we read in financial newspapers/ magazines about 'Share Swap' done by big corporates. What is 'Share Swap'?

  1. A business take over in which acquiring company uses its own stock to pay for the acquired company
  2. When a company uses its own shares to get some short term loan for working capital requirement, it is known as share swap
  3. When companies are required to float a new issue to earn capital for their expansion programmes, each share holder gets some additional preferential shares. The process of the allotment of preferential share is known as Share swap

  1. Only 1

  2. Only 2

  3. Only 1 and 2

  4. Only 3
Reveal answer Fill a bubble to check yourself
A Correct answer
Explanation

A 'Share Swap' in corporate finance refers to an acquisition method where the acquiring company pays for the target company using its own shares rather than cash.

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