medium · Principles of Finance time-value-of-money
Acquirer A (P/E = 20) is buying Target T (P/E = 15) in an all-stock transaction.
Assuming no synergies and no deal costs, how will this transaction affect Acquirer A's Earnings Per Share (EPS)?
- It will be accretive.
- It will be dilutive.
- It depends on the relative sizes of the two companies.
- It will be EPS neutral.
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