RE:Question for GrahamB, Reno, or WalterWhen the merger is stock for stock, the acquiring company proposes payment of a certain number of its equity shares to the target firm in exchange for all of the target company's shares. Provided the target company accepts the offer (which includes a specified conversion ratio), the acquiring company issues certificates to the target firm's shareholders, entitling them to trade in their current shares for rights to acquire a pro-rated number of the acquiring firm's shares. The acquiring firm issues new shares (adding to its total number of shares outstanding) to provide shares for all the target firm's converted shares.