easy · Investment Banking Valuation & Core Concepts
A buyer is performing an accretion/dilution analysis. The acquirer has a $P/E $ of 20x and the target has a $P/E $ of 15x.
In a 100% stock deal with zero synergies, the deal is most likely:
- Accretive
- It depends on the WACC of the combined entity.
- Dilutive
- Neutral
Sign up free to see the explanation and track your rank →
More Investment Banking Valuation & Core Concepts practice
- What is the control premium?
- 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…
- What is the Multiple on Invested Capital (MOIC)?
- An acquirer with a current P/E multiple of 20.0x is… Without considering synergies, will…
- In an LBO, if the entry multiple is 8.0x EBITDA and the exit multiple after 5 years is…
- Which valuation methodology would likely produce the 'floor' valuation for a mature…
- What is the Multiple on Invested Capital (MOIC)?
All Valuation & Core Concepts questions · Investment Banking study guide · Investment Banking glossary · Investment Banking flashcards