M&A & Merger Models
Two otherwise-identical deals, one all-cash and one all-stock at the same purchase price - which is more accretive and what's the trade-off?
Model answer
The all-cash (debt-funded) deal is almost always more accretive, because after-tax debt is cheaper than issuing equity at the acquirer's earnings yield, and no new shares dilute the denominator. The…
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What makes an acquisition accretive or dilutive to EPS?
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