Back to M&A questions
🤝 M&A
Medium
Company A (P/E 10x) acquires Company B (lower P/E). 5% interest rate, 40% tax rate. Should A use debt or stock for maximum accretion?
Answer
40) = 3%. Cost of equity = 1/10 = 10%.
Continue reading the full answer
Plus the detailed banker explanation of what interviewers are really testing.
accretion dilutionfunding mix