Accretion/Dilution and Fairness Opinions
Free FINRA Series 79 (Investment Banking Representative) lesson in Mergers and Acquisitions, Tender Offers and Financial Restructuring. 18 min read, ~2,656 words.
Accretion/dilution compares pro forma combined EPS to the acquirer's stand-alone EPS; higher is accretive, lower is dilutive. Quick screen for stock deals: if the acquirer's P/E exceeds the target's, the all-stock deal is accretive before synergies; if lower, it is dilutive. Pro forma net income equals combined net income plus...
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What this lesson covers
- Content
- Example 1
- Example 2
- Common Mistakes
- Check Your Understanding
- Exam Shortcuts
Learning objectives
- C23
- C24
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