M&A & Merger Models
What happens to accretion/dilution if the acquirer refinances the target's existing debt at close?
Model answer
You remove the target's standalone interest expense from pro forma income and replace it with interest on the new (refinanced) debt at the acquirer's borrowing rate. If the new rate is lower than the…
The full, human-reviewed answer is in the bank.
Sign up free and Daily 10 serves you 10 questions a day from all 2,300+ — or go Pro for unlimited reps.
Pro unlocks every model answer — $19.99/mo.
More from M&A & Merger Models
- What makes an acquisition accretive or dilutive to EPS?
- An all-cash deal: when is it accretive?
- What are synergies and what are the two types?
- What's the difference between a strategic buyer and a financial buyer?
- What does it mean for an acquisition to be accretive or dilutive?
- Walk me through how you calculate accretion/dilution at a high level.
Try the real thing
1 / 3LBO & Paper LBO
What is a leveraged buyout?
Superday coming up? Take the cheat sheet.
The technicals and stories to have cold before you walk in — free, one email, no mailing list.
Free tier: 20 cards + 10 daily reps + ALL drills — no credit card required.