easy · Investment Banking ma-lbo
An acquirer is considering an all-stock acquisition of a target. The acquirer has a P/E of 25.0x and the target is being acquired at an offer P/E of 18.0x.
Based on the rule of thumb for stock-for-stock deals, how will this transaction affect the acquirer's EPS?
- The transaction will be dilutive
- The impact cannot be determined without knowing the interest rate on debt
- The transaction will be accretive
- The transaction will be break-even
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