Guided Walkthroughs
Accretion/Dilution — Step 4 of 8: Why does the P/E rule of thumb ('accretive if acquirer P/E > deal P/E') actually work? Prove it with this deal's numbers.
Model answer
Think in earnings yields (E/P — earnings bought per dollar). AlphaCorp's stock 'costs' its own earnings yield: at 20x, every $1 of stock issued gives away 1/20 = 5.0% in earnings. The target, bought…
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More from Guided Walkthroughs
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- Full DCF — Step 2 of 12: Project SteadyCo's revenue and EBITDA for Years 1–5.
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- Full DCF — Step 5 of 12: Complete the 5-year unlevered FCF projection.
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