Question:

In an all-stock deal, how can you quickly tell if a deal will be accretive or dilutive?

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Answer:

In an all-stock deal, the deal will be accretive as long as the buyer has a higher P/E multiple than the seller.

This is because the buyer is paying less for earnings (net income) than what the market values their own earnings at.

Other

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Why would an acquisition be dilutive?

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What are some reasons for why a company would want to acquire another company?

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