medium · Investment Banking
A buyer is considering a $1,000 million acquisition. Structure A is 100% cash (financed with 5% after-tax debt), and Structure B is 100% stock.
If the target has $60 million in net income, which structure is more accretive to the buyer's EPS?
- Neither can be determined without the buyer's P/E
- Both are equally accretive
- Structure A (100% cash)
- Structure B (100% stock)
Sign up free to see the explanation and track your rank →
More Investment Banking practice
- What is the Multiple on Invested Capital (MOIC)?
- What is the control premium?
- Which valuation methodology would likely produce the 'floor' valuation for a mature indust
- Which of the following changes, held in isolation, would most likely achieve this?
- What is the Multiple on Invested Capital (MOIC)?
- If a company has an Unlevered Free Cash Flow (UFCF) of $500 million in Year 5, a WACC of 1
- What is the 3-year Compound Annual Growth Rate (CAGR)?
- If a company's Net Debt is negative, what is the relationship between its Equity Value and