medium · Principles of Finance valuation
Acquirer A (P/E of 20x) is considering an all-stock acquisition of Target T (P/E of 15x).
Assuming no synergies and no deal-related adjustments, how will this transaction affect Acquirer A's Earnings Per Share (EPS)?
- The effect cannot be determined without knowing the total purchase price.
- The deal will be accretive.
- The EPS will remain exactly the same.
- The deal will be dilutive.
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