medium · Investment Banking ma-lbo

A buyer is evaluating a 100% cash deal for a target with an earnings yield (E/P) of 8.0%. The after-tax cost of debt is 6.0%.

Assuming no synergies, how will this deal affect the buyer's EPS?

  1. Dilutive
  2. Accretive
  3. Neutral
  4. Insufficient information

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