JPMorgan Deck
Accretion drill: Acquirer has $100M net income, 100M shares, and a $15 stock price. It buys a target with $50M net income for $500M in an all-stock deal. Accretive or dilutive, and by how much?
Model answer
Acquirer standalone EPS = 100 / 100 = $1.00, so it trades at 15 / 1 = 15x earnings; it pays 500 / 50 = 10x for the target. Shares issued = 500 / 15 = 33.3M, so pro forma shares = 133.3M and pro forma…
The full, human-reviewed answer is in the bank.
Sign up free and Daily 10 serves you 10 questions a day from all 1,500+ — or go Pro for unlimited reps.
More from JPMorgan Deck
- Who was J. Pierpont Morgan, and why does his legacy still matter in a JPMorgan interview?
- How was the modern JPMorgan Chase created? Walk through the key mergers.
- What is the universal-bank model, and why is it JPMorgan's key structural differentiator versus Goldman Sachs and Morgan Stanley?
- What are JPMorgan's main business segments, and how should you talk about them in an interview?
- What does JPMorgan's 'fortress balance sheet' mean?
- Why does the 'fortress balance sheet' matter strategically? What has it allowed JPMorgan to do that weaker banks could not?