5
What Drives Accretion / Dilution
Three intuitions that let you call a deal before you build the full model.
Lessons in this module
Module checkpoint
3 questions · score 70% or higher to pass.
1.All-stock, no synergies: buyer P/E 18x acquires a target at a 14x deal P/E. The deal is:
2.Debt costs 5% and the tax rate is 20%. The after-tax cost of debt is:
3.Required after-tax synergies are $90M at a 25% tax rate. Required pre-tax synergies: