FIG (Banks & Insurance)
That deal dilutes TBVPS by $0.80 on 125M pro forma shares and adds $20M of annual earnings including synergies. What's the TBV earnback period, and what methods exist?
Model answer
Simple (static) method: aggregate dilution = $0.80 × 125M = $100M; divided by $20M of annual incremental earnings = 5.0 years to earn back the dilution. The market-preferred alternative is the…
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